Saudis Lower Oil Prices for Asia Following OPEC+ Restraint That Boosted Rally, According to Bloomberg

Saudi Arabia has announced a reduction in crude oil prices for its Asian customers, its largest market, following OPEC+’s decision to maintain slow production increases that caused oil futures to rise significantly.

The state-owned enterprise Saudi Aramco has adjusted its key Arab Light grade pricing for November, reducing it by 40 cents to $1.30 per barrel above the average prices of Oman and Dubai crudes, marking the smallest premium since March. Additionally, prices for nearly all other crude grades destined for the United States, the Mediterranean, and Northwest Europe have also been lowered.

This price adjustment was made after the OPEC+ alliance, led by Saudi Arabia and Russia, decided to continue its gradual production increase strategy despite rising demand for crude as a substitute for gas in power generation amid shortages in Europe and Asia. As a result of this decision, crude prices surged, reaching a seven-year high in the U.S.

The reduction in the official selling price for Arab Light crude aligns with market expectations. Since the beginning of this year, crude prices have increased by nearly 60% due to economic recovery from the pandemic and ongoing supply restrictions imposed by OPEC+.

Amin Nasser, CEO of Aramco, noted that demand for crude has risen by 500,000 barrels per day as some industries and power producers are shifting from gas to oil.

Saudi Arabia exports more than 60% of its crude to Asia, with China, South Korea, Japan, and India being the largest consumers.