Saudi Arabia raises oil prices
Saudi Arabia has raised the price of its flagship Arab Light crude oil by 90 cents for customers in Asia, Saudi Aramco said. The company has set the Arab Light price for Asian buyers at $1.65 per barrel for October.
While increasing the price of all crudes for Asian and European buyers, Saudi Arabia cut them for the US market by 30 cents per barrel, with Arab Light for the United States trimmed to Argus Sour Crude Index (ASCI) plus $0.20 a barrel. It also increased prices for the Mediterranean by $2.15 to the Brent weighted average (BWAVE) price minus $0.70/bbl and increased the price for northwest Europe by $1.35 to BWAVE minus $0.70 a barrel.
Saudi Arabia and Kuwait have increased oil output to avoid a sharp upturn in prices and a negative impact on the world economy. This comes after OPEC members agreed to control price levels after they hit record levels.
Kuwait's Oil Minister Mohammad Al-Baseeri explained that without this measure, oil prices would have shot above current levels causing a global crisis, contributing to a recession in the global economy like in 2008. Kuwait increased production to 2.5 million barrels per day (bpd), an increase of 600,000 bpd above its OPEC quota, while Al-Baseeri affirmed his country's capacity to produce 3.05 million bpd.
The effects on Libyan crude oil supplies due to the on-going Libyan war led the GCC countries to agree to raise their production levels several months ago after OPEC failed to convince other members including Iran and Venezuela to increase their output.