Saudi Aramco raises oil prices sharply after OPEC+ sticks to output plan

Saudi Arabia sent another bullish jolt into the oil market a day after OPEC+ ignored Biden’s calls for more oil, raising the official selling price of all the nation’s crudes to all buyers.

Aramco increased pricing for its key Arab Light grade of crude for Asian customers in December by $1.40 to $2.70. The state producer had been expected to raise it by between 50 cents and $1 a barrel, according to a survey last week.

The cartel ignored calls from US President Joe Biden to speed up the pace at which it’s raising output following last year’s Covid-triggered cuts. Instead, OPEC+ stuck with its plan to hike daily crude output by 400,000 barrels next month.

Analysts expect the oil market to remain under-supplied over the rest of the year following the decision by OPEC+, led by Saudi Arabia and Russia.

The continued supply curbs from the Organization of Petroleum Exporting Countries and partners have helped oil prices surge 60 per cent this year to more than $80 a barrel. This month, BP said global oil demand had surpassed 100 million barrels a day for the first time since the pandemic started.

Saudi Arabia sends more than 60 per cent of its crude exports to Asia, with China, South Korea, Japan and India the biggest buyers.

Most Middle Eastern countries set monthly prices as a premium or discount to a benchmark. Aramco’s OSPs serve as a bellwether for oil markets and often lead the pricing trend in the region.