Saudi Arabia raised oil prices for Asian buyers next month, signaling potential tighter supply in its largest market after OPEC+ delayed plans to increase production.
State oil producer Saudi Aramco set the price for its Arab Light crude grade at a $1.50 per barrel premium to the regional benchmark for February, according to a price list obtained by Bloomberg.
This marks a 60-cent increase, surpassing the 10-cent rise predicted in a Bloomberg survey of traders and refiners.
Benchmark oil prices in London have remained around $75 a barrel, after dropping about 3% last year, as slow demand growth, particularly in China, raises concerns about a surplus of oil.
Traders largely ignored the geopolitical risks in the Middle East last year, which reduced any risk premium in the market.
Now, they are waiting to see if the incoming administration of Donald Trump in the US will push for higher output or try to reduce supply through sanctions on certain countries.
Last month, the OPEC+ alliance, led by Saudi Arabia and Russia, decided to delay planned production increases for another three months, following two previous postponements.
The potential for an oversupply prompted the group to extend its output cuts into the next year to prevent flooding the market.
