FAST FIVE: As Oil Tumbles, Saudis Hike Asian Prices Near Record To Meet Soaring Demand

Published by on

As Oil Tumbles, Saudis Hike Asian Prices Near Record To Meet Soaring Demand With oil tumbling almost 10% this morning, one would think that a major oil consuming country has suddenly gone dark, plunging into a deep depression.

The Saudis also lifted the prices of all other grades for Asia in August, with Extra Light at a record premium.

The market viewed the price increase as a sign that the world's top crude oil exporter expects robust demand this summer despite growing fears of a recession that could sink demand.

Still, cargoes bound for Asia – a crucial market where China and India have stepped in to prop up Russian exports others have shunned in response to its invasion of Ukraine – were down by more than 15% on both a weekly and four-week average basis from the highs seen at the end of May.

Overall, Russia's seaborne shipments returned to 3.67 million b/d, broadly in line with the plateau level achieved since the start of April.   In other words, with Russian supply to Asia suffering a modest hiccup, it was Saudi Arabia's turn to step up and it did so at a near record price, a price which China incidentally had no problem paying because half a world away, a bunch of CTAs dumped oil because some other CTA dumped oil before them and the momentum-chasers all piled on, for which Beijing is very grateful.

Categories: ZH