State-owned Saudi Aramco has raised the price of Arab Light crude for sale to Asia by 30 cents to $3.50 a barrel above the benchmark, according to a price list seen by Bloomberg. This move comes after the kingdom, the world’s biggest oil exporter, extended a unilateral supply cut into September and said it could be prolonged further or even deepened.
Other oil producers, who have been struggling with low prices as a result of the COVID-19 pandemic-related global economic slowdown, are probably going to appreciate the decision to raise prices. The move is also expected to help support oil prices, which have been under pressure in recent months due to concerns about oversupply and weak demand.
Saudi Arabia has been taking steps to support the oil market, including cutting production and working with other members of the OPEC+ group of oil-producing countries to coordinate output. The kingdom has also been investing in new technologies and expanding its refining and petrochemical businesses in an effort to diversify its economy and reduce its dependence on oil.
Other oil producers are likely to be closely monitoring the price increase for Arab Light crude, which could have an impact on their pricing choices in the upcoming weeks. It remains to be seen how the move will impact global oil markets and whether it will lead to higher prices for consumers.
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