Saudi Arabia hikes oil prices as crude surges on Ukraine war

Dubai: Saudi Arabia raised oil prices for all regions after crude surged in the wake of Russia's invasion of Ukraine to more than $115 a barrel.

State-controlled Saudi Aramco hiked its Arab Light crude for next month's shipments to Asia to $4.95 a barrel above the benchmark it uses. That's an increase of $2.15 a barrel from March and the highest premium for the key grade since Bloomberg started compiling data in 2000. The energy company had been expected to raise pricing by $1.70, according to a survey of traders and refiners.

Aramco lifted other grades for Asia by as much as $2.70 a barrel. It raised all prices for US customers by $1, and those for northwest Europe by between $1.20 and $2.10. For the Mediterranean, pricing increased by as much as $2.

Oil is trading at its highest levels in nearly a decade as Russia's attack upends markets from commodities to stocks and bonds. Many buyers are avoiding crude from Russia because of concerns they could breach sanctions, even though the US and Europe have avoided directly penalizing Moscow's energy exports. That's stretching an already tight market and forcing buyers to look for alternative supplies, including from the Middle East.

Aramco's decision came after OPEC+, led by Saudi Arabia and Russia, on Wednesday opted to continue raising output only gradually. That was despite pressure from major importers, including the US., for the cartel's Persian Gulf members to pump faster and help bring down global fuel prices.

More than 60 per cent of Saudi Arabia's oil shipments go to Asia, with China, Japan, South Korea and India being the biggest buyers. Aramco's pricing moves often set the tone for other producers in the Middle East.