Worldwide oil prices increase due to supply concerns

Updated: Jul 16

As Saudi Arabia increases prices for Asia, crude reaches $120 a barrel.

Saudi Aramco, the world's largest oil and gas company, has suddenly increased its selling prices for Asia, raising concerns about dwindling supplies around the globe.

The official price for its flagship Arab Light crude in July jumped by $2.10 per barrel from the amount in June, according to an announcement made on Sunday by Aramco, the largest oil exporter in the world. According to market analysts cited by Reuters, the increase exceeded estimates of a $1–1.50 shift.

At 09:15 GMT on Monday, the benchmark Brent crude price increased by 42 cents to trade above $120 per barrel, while the US benchmark West Texas Intermediate (WTI) price increased by 35 cents to trade above $119 per barrel, close to a three-month high.

OPEC member nations and allies agreed earlier in June that they would increase oil production by 648,000 barrels per day over the following months rather than the anticipated 432,000 BPD rise per month. This came after prices rose sharply around the world in May due to worries about Western sanctions relating to Ukraine and their possible effects on Russian oil exports.

Analysts believe that oil prices will continue to rise despite OPEC's projected increase in output because they see it as inadequate given the surge in demand expected from the US summer, the easing of Covid-19 lockdowns in China, and uncertainty surrounding Russian supplies.

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