By Yusuf Khan

Saudi Arabian Oil Co., the nation's state-run oil company, raised its crude oil prices for Asia and Europe for August, as OPEC+ struggles to increase output.

Saudi Aramco raised the price of its benchmark Arab Light crude by $2.80 a barrel for Asian buyers to a premium of $9.30 a barrel compared to Oman and Dubai.

Buyers in Northwest Europe saw the premium rise by $1 a barrel to $5.30 against ICE Brent oil benchmark, while Mediterranean buyers saw the premium rise by $1.20 a barrel to $5.10.

The price hike comes as OPEC+ and its members struggle to lift oil output in the near term. Last week, the group agreed to raise oil output by 648,000 barrels a day, but analysts say the alliance is unlikely to meet its targets.

"The combination of sanctions against Russia, Europe's attempt to wean itself off Russian energy and many [OPEC] producers pumping at a pace close to capacity are major developments keeping the energy sector supported," Saxo Bank's Head of Commodity Strategy, Ole Hansen, said in a note.

"Adding the impact of years of underinvestment in both upstream and downstream capital expenditure, there is little refining spare capacity globally to meet the dual challenge of sanctions reducing Russian flows and a post-Covid recovery in demand," Hansen added.

Write to Yusuf Khan at yusuf.khan@wsj.com

(END) Dow Jones Newswires

July 05, 2022 07:41 ET (11:41 GMT)

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