Saudi Arabia Cuts Crude Oil Prices amid Lockdown in China Weighing on Demand

Saudi Arabia cuts oil prices for buyers in Asian amid lockdowns in China weighing on demand.

In four months, Saudi Aramco lowered its prices.  The state-controlled company dropped its key Arab Light crude grade for next month’s shipments to Asia to $4.40 a barrel above the benchmark it uses, from $9.35 in May.

Aramco also lowered all grades for the north west Europe region and almost all for the Mediterranean. Prices for U.S. customers were kept unchanged from May.

The world’s biggest exporter raised prices to record levels in the past two months after crude futures surged above $100 a barrel when Russia invaded Ukraine.

Earlier, Chinese Premier Li Keqiang warned in a statement on Saturday of a “complicated and grave” employment situation as the government tries to contain Covid.

“It’s obviously a terrible situation for citizens of Shanghai and entire parts of Beijing have been told to work from home,” Mike Muller, Vitol Group’s head of Asia, said Sunday on a podcast produced by Dubai-based Gulf Intelligence.

“But it hasn’t spiraled or snowballed into something really, really dramatic. Therefore people have not worsened their demand-loss projections from China.”

Saudi Arabia sends more than 60% of its crude exports to Asia, with China, Japan, South Korea and India being the biggest buyers.