(Reuters) – Saudi Arabia, world’s largest oil exporter, has raised July prices to Asian buyers. It did so amid worries about tight supply, and the expectation of strong summer demand.

Official selling price (OSP), for July-loading Arab Lights to Asia, was raised by $2.1 per barrel from June to $6.5 per barrel. This is just $1.5 more than Oman/Dubai quotations.

This was significantly higher than the market’s forecasts for an increase of $1 to $1.5.

“The Arab Light is surprised by the price increase. An Asian oil trader said that they were puzzled by the outcome.

Oil producer state has increased its production Saudi Aramco (TAWUL:) The agreement reached by OPEC+ members to raise output by 648,000 barrels per daily (bpd), for July and August, in order to compensate Russian supply shortages. This is compared to the initial plan to increase 432,000 bpd per month for three months, until September.

The increases were divided among member states, including Russia and Nigeria. These countries struggle to achieve their goals and there are fears that official plans may not be met.

The northern hemisphere countries, like the United States of America, usually start their driving season in July, which causes gasoline demand to surge. China, which is world’s largest oil importer, has begun to reopen some Chinese cities like Shanghai following lengthy COVID-19 lockdowns.

According to another Asian oil trader, “Demand for this cycle is strong” and Saudi Arabia can afford OSPs hikes.

A steady flow of Russian oil to China, India and China could counter some demand for Saudi oil. These countries have not condemned Moscow’s invasion of Ukraine but have increased their purchases of Russian cargos at discounts.

Moscow claims it’s conducting a special military operation to dearm Ukraine and defend it against fascists. Russia claims that the Western countries are using it as an excuse to invade Ukraine, but they dismiss them.

Saudi Aramco also increased its OSP to European and Mediterranean buyers on Sunday, while keeping U.S. differentials the same.

Saudi crude supply to Asia is priced at a

Different to Oman/Dubai Average:

July June Change

SUPER LIGHT 8.50 575 2.75

EXTRA LIGHT 7.15 – 4.65 2.50

LIGHT 6.50 4.40 2.01

MEDIUM 6.15 4.35 1.80

HEAVY 4.80 3.00 1.80

Ras Tanura Prices destined to the United States

ASCI has been stifled

July June Change

EXTRA LIGHT 7.00 7.00 0.00

LIGHT 5.65 5.65 0.

MEDIUM 4.95 4.95 0.00

HEAVY 4.50 4.50 0.00

Ras Tanura prices destined to Northwest Europe

ICE (NYSE) –

July June Change

EXTRA LIGHT 6.80 1.20

LIGHT 4.30 2:10 2.20

MEDIUM 1.30 -0.10 1.40

Heavy -2.60 to 4.10 1.50

Ras Tanura prices for Saudi oil

The Mediterranean set against ICE Brent

July June CHANGE

EXTRA LIGHT 6.80 1.20

LIGHT 3.90 1.90 2.00

MEDIUM 1.40 0.20 1.20

HEADY 2.80 -3.00 0.20