By Will Horner

Saudi Arabia raised its July prices for crude sales to Asian buyers on Monday, a day after an OPEC+ meeting in which it said it would slash oil output by 1 million barrels a day.

Saudi Arabian Oil Co., commonly known as Saudi Aramco, raised prices for its benchmark Arab light crude by $0.45 a barrel for Asian buyers.

The price the state oil giant sets is seen as a barometer for how Saudi Arabia views the outlook for oil demand in China, one of its largest markets and a major consumer of global oil supplies. Raising prices is typically taken as an indication that it is optimistic about demand.

Yet the hike comes a day after a meeting of the Organization of the Petroleum Exporting Countries and their allies, known collectively as OPEC+, in which Saudi Arabia said it would unilaterally slash output by 1 million barrels a day beginning in July. Other members of the group left their supply plans unchanged.

The cut marks the third time since October that Saudi Arabia has reduced its output though previous cuts were taken in concert with other OPEC+ members. That is despite widespread expectations, including from OPEC's own analysts, that the oil market is tightening thanks to growing Chinese demand.

Monday's price changes mean buyers in China and elsewhere in Asia will pay a $2.55-a-barrel premium for Saudi crude over the average of the Oman and Dubai oil prices benchmarks. Prices for all other varieties of oil sold to Asia, from super light to heavy, were also raised by the same amount.

Aramco also raised prices for North American consumers for all varieties of crude by $0.90 a barrel. Meaning sales of Arab light crude there will carry a $7.15-a-barrel premium over the Argus Sour Crude Index.

For Northern Europe, prices were also raised by $0.90 a barrel across all varieties. Meaning light crude sales there will carry a $3-a-barrel premium over Brent prices.

For Mediterranean buyers, Aramco raised prices by $0.60 a barrel across all varieties. July light crude sales there will carry a $2.50-a-barrel premium versus Brent.

Write to Will Horner at william.horner@wsj.com

(END) Dow Jones Newswires

June 05, 2023 11:46 ET (15:46 GMT)

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