Saudi Arabia has sharply increased the price of its flagship crude oil for Asian buyers, pushing it to the highest premium ever recorded as the Iran war
continues to unsettle global energy markets. Saudi Aramco, the world’s largest oil company, has announced its May selling price for Arab Light crude (the particular grade of oil from Saudi Arabia) in Asia is $19.50 per barrel above the benchmark price. This is the highest premium ever charged for Arab Light; however, it is not as high as the $40/barrel that many market participants had anticipated from previous months. The decision comes as the Middle East conflict enters its sixth week, severely disrupting shipping routes and oil supplies through the Strait of Hormuz. Escalating Tensions US President Donald Trump issued fresh warnings over the weekend, threatening to strike Iranian power plants and bridges if the Strait of Hormuz is not reopened. In a post on Truth Social, he said, “Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!!” Iran has responded strongly, warning that any attack on its infrastructure will be met with a similar response. Oil Prices Stay HighOil prices have remained well above $100 per barrel since the conflict began. On Monday: West Texas Intermediate (WTI) rose 1.86% to $113.62 per barrel Brent crude gained 1.16% to $110.30 per barrel Last Thursday, WTI crude jumped more than 11% and Brent crude gained almost 8%, led by strong signals that there may be ongoing military action against Iran. As a result, gasoline, diesel and jet fuel prices have already increased as a result of the sudden rise in crude prices. Global supply chains are under increasing pressure, putting additional strain on already-challenged global economic models that are dealing with increasing costs of supplies and services due to the conflict in the Middle East.
