Saudi Arabia raises oil prices in Asia as volatility grips the market

State producer Saudi Aramco raised the official selling price of its main Arab Light crude by 90 cents to a premium of $2.20 a barrel to the regional benchmark for buyers in Asia, according to a listing of prices seen by Bloomberg. The company was expected to raise the premium by 65 cents a barrel, according to a survey of traders and refiners.

At the same time, Aramco reduced the price of all classes to the US and Europe.

Oil has risen since early October, when Iran launched missiles at Israel in retaliation for devastating attacks in Lebanon that nearly destroyed the Hezbollah leadership. Benchmark Brent crude has gained about 8 percent this week amid strikes and anticipation of potential Israeli retaliation to trade around $78 a barrel.

Markets have so far shrugged off most regional risks so far this year as the conflict has not reduced supply and traders have instead focused on deepening worries about weak demand. Amid concerns that China’s slow oil use will leave extra crude on the market, the OPEC+ alliance – led by Saudi Arabia and Russia – last month halted a planned production increase for two months until early December.

Group members who made voluntary production cuts will not continue with an earlier plan to start rolling back those cuts in October and November. The delay in bringing back barrels could leave Saudi Arabia exporting less than 6 million barrels a day, as it has for the past four months.