Saudi Arabia defied expectations by keeping oil prices for its primary market of Asia relatively stable and lowering those for Europe, defying predictions that it would raise them and put additional pressure on consumers a day after OPEC+ decided to reduce output. For supplies to Asia in November, state-controlled Saudi Aramco kept the price of its essential Arab Light grade at $5.85 a barrel more than the benchmark for the Middle East.
Tamas Varga, an analyst at the brokerage PVM Oil Associates in London, After OPEC+ decided on Wednesday to reduce its output target for the month of January by 2 million barrels per day, a significant rise would have further compressed the crude market. At a time when many nations are “Reeling from higher energy prices,” the White House called it “Short-sighted.” Since June, crude prices have decreased after initially rising in the wake of Russia’s invasion of Ukraine. But even at that price, they are still up over 20% this year.
Giovanni Staunovo a strategist at UBS Group AG, told the firm’s action may be intended to offset Russia’s aggressive attempts to access Asia. Beginning in early December, the European Union would forbid all seaborne imports of crude oil from Russia, forcing Moscow to go elsewhere. Staunovo stated that Aramco is “Aiming to maintain its market share” in Asia. The main buyers are India, China, Japan, South Korea, and South.