Published: Sun, June 10, 2018
Markets | By Noel Gibbs

Saudi Aramco Raises Asia Oil Pricing to 4-Year Highs

Saudi Aramco Raises Asia Oil Pricing to 4-Year Highs

OPEC's No. 3 producer Iran is also subject to U.S. sanctions, including curbs on its oil trade, after President Donald Trump quit an worldwide accord on the Islamic Republic's nuclear program last month.

"This is occurring because of the rapid increase in production from U.S. shale coupled with the tightening of supplies elsewhere through the actions of OPEC and Russian Federation", said William O'Loughlin, investment analyst at Australia's Rivkin Securities.

Benchmark indices for crude oil were mixed throughout much of the previous session after reports circulated that the USA was calling for more oil from OPEC tacitly to protect against steady declines from Venezuela and possible declines from Iran.

Back in April, when oil prices hit a three-and-a-half year highs, U.S. President Donald Trump slammed OPEC for manipulating oil prices in a tweet saying that oil prices were "artificially very high" and "will not be accepted".

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The average price for a barrel of OPEC's reference basket of 14 different crude oil varieties rose from $40.76 in 2016 to $52.43 in 2017.

Riyadh took this line partly because higher crude prices could help the stock market float of a stake in state oil giant Saudi Aramco expected to take place in 2019, Saudi industry sources had told Reuters.

May shipments were 39.05 million tonnes, or 9.2 million barrels per day (bpd), according to the General Administration of Customs.

Iran would benefit less than Saudi Arabia from an increase in supplies if it can not raise output, as well as receive a lower price for existing production. US oil production is up 1.5 million bpd from a year earlier.

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This comment followed an unofficial request from the United States asking OPEC's de-facto leader Saudi Arabia to boost output. Crude, the worldwide benchmark, was mostly unchanged. The increase shows that lack of supply that is coming from OPEC crude relative to supply from US production.

Analysts insist oil prices are heading higher. "$80 is a temporary ceiling for oil until we hear from OPEC".

Iran has called on OPEC to discuss what it called "illegal" sanctions at the next meeting on June 22, which is due to debate production policies.

Iran and Venezuela have separately pleaded over the past week to their fellow OPEC members for support and solidarity against the US sanctions.

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