The state-owned oil giant raises prices amidst global tensions while cutting rates for European and US markets

Riyadh – Saudi Aramco has announced a price hike for its Arab Light crude oil aimed at Asian buyers for November 2024. The state-owned oil giant has raised the official selling price by 90 cents, setting it at $2.20 per barrel above the regional benchmark. This adjustment comes amid a backdrop of rising global oil prices, driven in part by escalating tensions in the Middle East.

The increase aligns with market forecasts, which predicted a rise of around 45 cents, while simultaneously pushing the medium sour crude price to its highest level this year. On Thursday, global crude prices surged approximately 5%, reflecting growing apprehension over the geopolitical landscape. Despite this spike, analysts caution that slowing demand in various countries, coupled with a robust supply both within and outside the Organisation of the Petroleum Exporting Countries (OPEC), may eventually temper further price increases.

In contrast to the hikes for Asian markets, Aramco has opted to slash prices for all grades of crude oil destined for Europe and the US. The price differential for Arab Light crude in Western Europe has been established at $0.45 above the ICE Brent benchmark, highlighting the company’s strategy to remain competitive in a fluctuating market.

In addition to the increase for Arab Light crude, Aramco also raised the price for Extra Light crude aimed at Asian buyers by 50 cents, bringing it to $3.35 per barrel above Oman/Dubai quotes. This decision reflects the ongoing upward trend for light sour grades in the spot market. However, prices for Arab Medium and Arab Heavy grades have remained stable, indicating a strategic approach by Aramco to balance its pricing across different crude oil grades.

This pricing strategy comes on the heels of Saudi Arabia’s confirmation that it will maintain its voluntary output reduction of 1 million barrels per day through November and into December 2024. This decision aims to support market stability and align with the Kingdom’s broader economic objectives.

The oil market continues to navigate a complex landscape shaped by geopolitical factors, demand fluctuations, and supply dynamics. As tensions persist in the region, market participants are closely monitoring developments that could impact crude prices in the coming months.

Aramco’s pricing adjustments illustrate the company’s responsiveness to global market trends and its commitment to sustaining its position as a leading player in the international oil market. The increase in prices for Arab Light crude, along with the strategic cuts for European and US buyers, reflects the delicate balance Aramco must maintain in a rapidly evolving energy landscape.