- Saudi Arabia will raise oil prices next month for Asian buyers to $9.30 a barrel above the regional benchmark.
- Prices from of the world's largest oil producers have skyrocketed past other countries in the Middle East.
- Although OPEC+ agreed to raise production in July and August, experts say it'll be hard to meet targets.
Saudi Arabia will be raising oil prices next month for Asian buyers, a sign that oil suppliers are still slammed with high demand as they run out of capacity to keep up.
Saudi Aramco, the state oil producer, hiked prices for Arab Light crude grade in August to $9.30 a barrel above the regional benchmark. It means that prices for one of the world's largest oil producers have skyrocketed past other countries in the Middle East, almost surpassing its previous high of $9.35 a barrel in May.
It's another increase in prices this year as oil producers have struggled to meet demand this year amid Western sanctions against Russian oil. Saudi Arabia's prices for Asia have risen over $7 since Russia invaded Ukraine at the end of February, according to Bloomberg.
Although OPEC+, which Saudi Arabia is a member of, agreed to raise production by 648,000 barrels a day throughout the months of July and August, industry heads have speculated the organization will be unable to meet those targets.
"We are seeing an ever tighter oil and gas market appearing – and we are feeling that right now," Shell CEO Ben van Beurden said last week in a report by CNBC. "I cannot know how much spare capacity OPEC would have but it is not as much as what a lot of people hope or think is my estimation."
S&P Global previously told Insider that some countries within the cartel have missed production quotas earlier this year, which has left OPEC+ 2.6 million barrels a day short of their collective goal as of June. Meanwhile, S&P also estimates oil demand to rise by 1.7 billion barrels a day in Asia, which would more than double the continent's pre-pandemic demand.