Crude oil prices rose at the start of this week after Saudi Arabia said Sunday it would raise its oil prices for most regions, excluding the United States.

The increase in prices was the biggest for Asian buyers, with the flagship Arab Light set to sell for $2.10 per barrel more than it did this month, at $6.50 per barrel over the Oman/Dubai benchmarks.

Arab Light will be more expensive for the European market as well. Saudi Arabia hiked the price for the grade that is similar to Russia’s Urals by $2.20 for European buyers, to $4.30 per barrel over Brent crude.

Brent crude meanwhile topped $120 per barrel yet again, with West Texas Intermediate close behind at over $119 per barrel at the time of writing.

“Mere days after opening the spigots a bit wider, Saudi Arabia wasted little time hiking its official selling price for Asia, its primary market…seeing knock-on effects at the futures open across the oil market spectrum,” Stephen Innes, managing partner at SPI Asset Management, said in a note quoted by Reuters.

The wider opening of the spigots remains to materialize, as several analysts have noted. Some have noted that despite the fact that Saudi Arabia is one of the few OPEC members that have spare capacity, it may be wary of tapping it in any sizeable way right now.

Meanwhile, demand, especially in Asia, is rising, as evidenced by the price move by Riyadh.

“A lot of the south-eastern Asian countries, where I’m based, are very much exceeding expectations in terms of road-transportation demand,” the Asian operations head of Vitol, Mike Muller, told Bloomberg. “And try buying an air ticket in Singapore in the summer holidays. It’s awfully tough.”

If demand continues on this trajectory, prices could jump even higher on international markets, Matt Smith from Kpler noted last week.

“If Chinese demand comes roaring back after lockdowns and Russia continues to see production drop, then a retest of the high of $139 seen earlier in the year is not beyond the realms of possibility,” he told CNN.

By Irina Slav for Oilprice.com

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