Aramco, the Saudi Arabian energy giant, has said it sees demand in Asia and Europe beginning to pick up so it is raising its prices for those regions.
The company’s flagship Arab Light crude will increase up to $2.50 per barrel above the regional benchmark. That is a rise of 50 cents over the level for March.
Arab Heavy, a slightly more sulfur-rich sour crude, will rise $2.50 per barrel over March’s level.
It is the second consecutive month that the biggest market, Asia, is seeing the world’s biggest oil company raise its prices. About 60% of the crude shipments to Asia are delivered by Aramco, under long-term contracts, with pricing reviewed every month.
Aramco also noted that it will be hiking prices for North-West Europe and the Mediterranean by up to $1.30 per barrel, while US pricing will remain unchanged.
Amin Nasser, Aramco’s chief executive officer, said, “The demand from China is very strong,” noting it was also “excellent” in the US and Europe.
Demand from China has been rapidly increasing as the nation reopens finally from its intermittent Covid lockdowns. The International Energy Agency (IEA) has predicted that China’s consumption with be the primary driver for the growth in demand for oil this year, which is predicted to soar to 101.9 million barrels per day (bpd).
For its part, the OPEC+ group of major oil producing countries has indicated it will not be increasing production until at least 2024. In addition, Russia had announced that in response to Western sanctions imposed upon it over the war in Ukraine, it will cut its oil production by 500,000 barrels per day starting in March.
Oil began the week in decline. On Tuesday benchmark Brent was down slightly, at around $85 per barrel. US benchmark West Texas Intermediate was also down, trading below $80 per barrel.
