Saudi Arabia lowers price of crude oil to Asia and Europe
After hitting a record high, Saudi Arabia’s oil producer Aramco lower its June price for shipments to Asia and Europe, those to US will remain unchanged.
According to a pricing document released on Sunday by Saudi Arabia’s oil producer Aramco, June shipments of its Arab Light crude grade will be lowered. The price decease will affect oil destined for Asia and Europe, while the benchmark sold in the United States remained unchanged from May.
Asia saw the price of Saudi oil hit an all-time high last month as the world’s top oil exporter raised prices for all regions. Fears of disruption in Russian oil and gas supplies due to bans and sanctions imposed on the country after Vladimir Putin ordered an invasion of Ukraine have caused jitters in international energy markets.
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Price per barrel to drop between two and five dollars
After spiking in March, the price of crude oil has come down but the benchmark for Brent crude has remained consistently above the $100 since the beginning of March. The move by Aramco to decrease its price differential comes as demand from Asia grows tepid with China struggling to contain a covid-19 outbreak in Beijing and a weeks-long lockdown of Shanghai.
Importers in the Far East will see the biggest drop in the price per barrel for Saudi’s Arab Light, going from $9.35 above the average of the Oman and Dubai benchmarks in May down to plus $4.40 per barrel. Northwest European buyers will see a decrease of $2.50 per barrel with the Arab Light price differential set at $2.10 per barrel above ICE Brent in June, according to the document.
Importers in the United States will continue to pay $5.65 per barrel above the Argus Sour Crude Index in June, unchanged from last month.
The price of gasoline in the US has reversed course, rising again
The price per gallon of gasoline in the US had been slowing moving down after peaking at $4.33 on average in March. However, expectations that it would drop back below $4 never materialized and it is now approaching the previous high jumping over 13 cents in the past week according to AAA. The price in 2022 is almost 50 percent higher than it was a year ago.
The rapid rise in the price of gas has been weighing heavily on American households with calls to bring relief. President Biden announced last month that the US would release one million barrels a day for the next six months from the nation’s strategic reserves. That move is being done in coordination with other nations to replace some of the lost supply from Russia. Additionally, US lawmakers have put forth proposals to provide direct financial relief to Americans.