Saudi Aramco raises oil prices for sale to US but cut to Europe

Saudi Arabia, the world’s largest crude exporter, raised pricing on most oil grades for sale to Asia and the US in July after the nation’s energy minister said demand was robust.

State-owned Saudi Arabian Oil Co. increased its official selling price for Arab Light crude by 35 cents a barrel to 60 cents more than the regional benchmark for sales to Asia. 

Saudi Aramco was expected to raise the premium for shipments of Arab Light crude by 40 cents a barrel to 65 cents a barrel more than the benchmark for buyers in Asia, Bloomberg reports.

“This shows that they’re getting more bullish on demand,” the chief executive officer at consultant Qamar Energy in Dubai, Robin Mills, said, adding that they’re still seeing very robust demand from China.

Saudi Arabia also cut its oil prices to Europe, signaling mounting competition after OPEC failed to cap its output amid Iran’s exports ramp up.

In an email sent to customers, state oil company Saudi Aramco said it had cut its light crude prices by 35 cents a barrel to northwest Europe and by 10 cents a barrel to the Mediterranean for July deliveries.

The company also increased pricing for US buyers on all grades except Extra Light. Arab Light crude for US buyers increased by 20 cents a barrel, to 55 cents more than the regional benchmark. 

The price reduction is surprising, as demand typically grows in the second half of the year as refineries return from maintenance. In addition, markets have recently been buoyed by outages in countries like Nigeria, the Wall Street Journal reports.