By Will Horner
Saudi Arabia lowered its January selling prices for the flagship light crude it sells to Asia despite signs that China is easing some of the Covid-19 restrictions that have crimped its huge appetite for crude.
Saudi Arabian Oil Co. cut the price of its benchmark Arab Light crude sold into Asia by $2.20 a barrel, meaning sales next month will carry a $3.25 a barrel premium over the average of the Oman and Dubai benchmarks
The company, commonly known as Saudi Aramco, also lowered the prices of its super light, medium and heavy varieties by $1.80, $1.10 and $2.50 a barrel, respectively
Aramco cut prices for customers in Europe but made no changes to its prices for sales into the U.S.
Customers in Northern Europe will pay $1.80 a barrel less for Aramco’s Arab Light crude in January than in the previous month while customers in Southern Europe will pay $1.50 a barrel less.
Prices for buyers in the U.S. of all varieties were left unchanged.
The changes mean buyers in both Northern and Southern Europe will pay $0.10 a barrel less than the Brent crude benchmark. U.S. buyers will continue to pay a $6.35 a barrel premium over the ASCI benchmark.
The changes come despite expectations that oil demand in China could get a boost in the coming months as Beijing looks to ease the Covid-19 lockdowns that have weighed heavily on the nation’s demand for crude. Major cities have already begun relaxing some measures though surging caseloads have cast doubt on how swiftly policies will be relaxed.
Saudi Arabia, a leading member of the Organization of the Petroleum Exporting Countries, is also trying to gauge the impact on oil prices from fresh Western sanctions on Russian oil–including a price cap–which are set to come into force Monday. Russia has threatened to withhold oil supplies from those nations partaking in the price cap.
Write to Will Horner at firstname.lastname@example.org