Saudi Aramco, the world’s leading oil exporter, has raised the price of its crude oil for February 2025 shipments to Asia, signaling a tightening supply in its biggest market. The price increase follows the Organization of the Petroleum Exporting Countries (OPEC+) decision to extend production cuts, along with diminishing supplies from Russia and Iran. Aramco raised the premium for its Arab Light crude by 60 cents per barrel, pushing it to $1.50 above the regional benchmark—surpassing expectations. This marks the first price hike in three months, following two months of reductions due to weak refining margins.
Prices for other crude grades sold to Asia were also bumped up by 40 to 60 cents per barrel. However, prices for the US market were reduced, while price hikes were implemented for all grades going to the Mediterranean and northwestern Europe. The rise reflects growing concerns over potential supply disruptions from Russia and Iran, with US sanctions exacerbating the situation. As a result, countries like China and India are turning to West Asia for crude to fill the gap left by Russian oil cuts.
Meanwhile, OPEC+ has opted to delay planned production increases until April 2025, maintaining its cuts until the end of 2026 in response to sluggish demand. Despite the global oil market’s slow growth, India is expected to lead the way in rising oil demand, accounting for a quarter of the world’s demand growth in 2025, according to the US Energy Information Administration.
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