Saudi Arabia, the world’s top oil exporter, raised July crude oil prices for Asian buyers to higher-than-expected levels amid concerns about tight supply and expectations of strong demand in summer.
The official selling price for July-loading Arab Light to Asia was hiked by $2.1 a barrel from June to $6.5 a barrel over Oman/Dubai quotes, just off an all-time-high recorded in May.
That was much higher than most market forecasts for an increase around $1.5. Only one respondent of six in a Reuter’s poll had predicted a jump of $2.
“The price jump is unexpected, especially the Arab Light. We are puzzled by the decision,” said an Asian oil trader.
The hike by state oil producer Saudi Aramco came despite an agreement by OPEC+ states to boost output by 648,000 barrels per day (bpd) in July and a similar amount in August in an effort to offset Russian supply losses.
That compares with an initial plan to add 432,000 bpd a month over three months until September.
But the increases have been divided across member countries, including Russia and states such as Angola and Nigeria which struggle to meet their targets, leading to fears that the actual boost to supply may fall short of official plans.