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Saudis Raise Asia Crude Pricing as U.S. Puts Curbs on Iran | Bloomberg

Saudi Arabia raised pricing for the Medium and Heavy crudes it sells to Asia, a sign that OPEC’s biggest producer sees robust demand for the grades as it boosts output to offset the impact of energy sanctions on Iran.

State-owned Saudi Aramco increased its official selling price for December sales of Medium crude to Asia by 20 cents, to 70 cents a barrel more than the Middle East benchmark, the company said Monday in an emailed statement. That puts the Medium grade at its highest premium since January 2014. Aramco raised pricing for Heavy crude by 40 cents, narrowing a discount to the benchmark to 25 cents a barrel. Both grades are similar to Iranian crude.

The higher Asia pricing for Medium and Heavy crudes suggests that the company, known formally as Saudi Arabian Oil Co., expects the market for those grades to tighten. The Brent-Dubai spread, a measure of the price difference between light and heavier crudes, is near its narrowest in a year, according to data from PVM Oil Associates Ltd. Middle Eastern oils, including the Dubai benchmark, are generally heavier than Brent and other European crudes, making them more difficult to refine.

Aramco cut monthly pricing for Arab Light crude to Asia by 10 cents to $1.60 a barrel more than the benchmark. Four traders in a Bloomberg survey had forecast a 20-cent reduction in the grade.

The company raised pricing on all of its grades to the U.S. and to Northwest Europe. It cut most crudes to the Mediterranean region, increasing pricing only for its Heavy grade.

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Saudis Raise Asia Crude Pricing as U.S. Puts Curbs on Iran – Bloomberg.