Saudi Arabia hiked oil supply prices for Asian and US clients just days after “OPEC” and its allies surprised the world by increasing output.
Despite the expansion of the COVID-19 Omicron strain, the world’s top petroleum exporter is still enjoying good demand in its two key markets, according to the move.
Saudi Aramco, the state-owned oil company, hiked January crude prices for all grades that would be exported to Asia and the US. The corporation raised the price of Arab Light crude for Asian consumers by 60 cents from December to $3.30 a barrel, which is more than the benchmark.
According to a poll done Friday of six dealers and refiners in Asia, Aramco was expected to hike the rates of long-term contracts for Arab Light oil by around 70 cents a barrel.
Despite the danger posed by the “Omicron” pressure on demand, the “OPEC +” coalition, led by Saudi Arabia and Russia, voted last Thursday to increase supply next month. If the market worsens, the “OPEC +” coalition has suggested that it may adjust its intentions in the short term.
Oil prices have fallen for the sixth week in a row, owing to the spread of the “Omicron” strain, the potential of more barrels hitting the market, and the willingness of major oil importers, particularly the US, to lower domestic fuel selling prices. Since the beginning of November, crude oil has lost roughly 20% of its value, bringing this year’s advances to a halt.
Moreover, 60% of Saudi Arabia’s crude oil exports go to Asia, with China, South Korea, Japan, and India being the top consumers. The official selling prices (OSPs) of Saudi Aramco are a major driver of the oil markets, typically dictating the region’s pricing trend. As a result, most Middle Eastern nations determine their monthly pricing based on the major criterion plus or minus.