Saudi Arabia raises oil prices to Asia for fourth month in a row

SAUDI Arabia gave customers in Asia and the US small price hikes for its crude a day after the kingdom and Russia prolonged their efforts to tighten the oil market.

State-owned Saudi Aramco raised its flagship Arab Light price to Asia in October by 10 US cents to US$3.60 a barrel more than the benchmark, according to a price list seen by Bloomberg. While that’s still the highest since December, the hike while lower than an expected 30 US cent increase in a Bloomberg survey.

For US-bound supplies, Opec’s de facto leader raised prices for all grades by 20 US cents a barrel to a record high.

The move comes after Saudi Arabia said this week that it will prolong supply cuts into December. It will hold output at about 9 million barrels a day, the lowest level in several years, while Russia is extending its own export curbs.

That has sparked confidence that the oil market is set to see a strong end to 2023. Following months of tightening supply, Brent crude futures topped US$90 a barrel in recent days and some traders are wagering on US$100.

There was some relief for buyers in Europe, which have been subjected to a string of sharp price hikes in recent months. Aramco cut the cost of supply into the Mediterranean and Northwest Europe by 10 US cents a barrel, the list showed, though they remain high historically.

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Customers of the kingdom’s crude in Europe have had to scramble for alternatives with many now switching to sweet, or low-sulphur, oil.

The prices of more sulphurous crude, which makes up a majority of the Saudi supply reductions, have soared so far this year, and have at times left benchmark Brent crude futures trading at unusual discounts to lower-quality barrels from the Middle East. BLOOMBERG