Saudi Arabia cut its prices for crude oil sold in Asia and Europe for the month of June against a backdrop of waning demand driven by Covid-19 lockdowns in China.
Saudi Arabian Oil Co., the nation’s state-run oil company, cut the price of its Arab Light crude benchmark in Asia by $4.95, taking its price for June to a $4.40 premium above the average of the Oman and Dubai benchmarks. In May the premium stood at $9.35.
Sale prices to northwest Europe were also reduced by $2.50, meaning sales to the region now carry a $2.10 premium over Brent, the international oil benchmark. Sales to the Mediterranean region were reduced to $1.90 over the Brent benchmark, a cut of $3.00.
Sales to the U.S. were unchanged. Since May, the premium on sales to the U.S. over the Argus Sour Crude Index has stood at $5.65.
Since the war in Ukraine, the company has hiked its sales prices significantly amid soaring prices, driven by concerns that Russian oil supplies would be severely constrained by Western sanctions.
In recent weeks, however, oil prices have moderated but remained above the $100 a barrel level. Covid-19 cases in China and lockdowns in major cities have raised concerns about weakening demand for oil.