Saudi Arabia has increased oil prices for Asia due to the Middle East conflict.
Saudi Arabia raised April prices for its flagship Arab Light oil for Asian buyers by $2.50 per barrel. This was a result of the escalation of conflict in the Middle East and the virtual closure of the Strait of Hormuz, which caused significant fluctuations in energy markets.
The price hike was the largest since August 2022. Saudi Aramco took this action amid a turbulent situation in the region, particularly due to hostilities between US-Israeli forces and Iran, which led to the virtual closure of the Strait of Hormuz. This strategic waterway is a key route for oil shipments from the Persian Gulf to global markets.
Due to the closure of the strait, Saudi Arabia was forced to reroute its oil shipments through the western port of Yanbu on the Red Sea coast, using a pipeline with a capacity of 5 million barrels per day. However, the storage tanks at Middle Eastern petrochemical plants are rapidly filling up, which also threatens their normal operation.
Analysts note that the change in oil prices will play a significant role in shaping energy policy in the region. Ahead of the expected hike, the consequences of the conflict may become even more pronounced in the market, especially if the situation in the region continues to escalate.
| Event | Date | Details |
| Oil price increase | March 2023 | Arab Light for Asia: +$2.50/barrel |
| Closure of the Strait of Hormuz | March 2023 | Reason: conflict between the US, Israel, and Iran |
| Rerouting oil to Yanbu | March 2023 | Pipeline: 5 million barrels/day |
| Oil price decrease | March 6 | Only after six days of increase |
