Middle East conflict hits energy market, Saudi Arabia raises selling prices to Asia to record premium levels.

With the escalating Persian Gulf conflict and the near closure of the Strait of Hormuz, the energy market is in a state of severe volatility. Saudi Arabia has raised the prices of its main crude oil grades sold to Asia to record premium levels. According to reports, Saudi state-owned oil producer Saudi Aramco will raise the price of its flagship product, Arab Light crude, for delivery to Asian refineries in May to a premium of $19.50 per barrel above the regional benchmark. Saudi Aramco has raised the price of crude oil sold to Asia to record premium levels. However, this level is still lower than the expected $40 per barrel premium that traders and refiners had anticipated in a survey. Traders say that part of the reason for the discrepancy with market expectations is due to the volatile market conditions, as well as a drop in prices of some Middle Eastern crude oil grades in the last week of March. In addition, Saudi Aramco's pricing of crude oil is based on conditions for shipment from the Ras Tanura port along the Persian Gulf coast, but currently all the company's exports are shipped through the Yanbu port along the Red Sea coast, which typically results in additional costs for buyers. The US and Israel's military strikes on Iran have disrupted the global energy trade landscape, with Iran effectively closing off the crucial Strait of Hormuz and cutting off supply routes for neighboring countries to export from the Persian Gulf. Since the outbreak of conflict, Brent crude prices have risen by more than 50% and fuel prices have soared significantly. Among the Gulf producing countries, only Saudi Arabia and the UAE have large-scale alternative export channels that can bypass the bottleneck of the Strait of Hormuz. Saudi Aramco's pipeline capacity to the Red Sea coast has reached its maximum level of 7 million barrels per day, with the company currently exporting close to 5 million barrels of crude oil per day through this route, accounting for about 70% of pre-conflict total exports. Saudi Aramco CEO Amin Nasser stated in a conference call on March 10th that the company has shut down most of its medium and heavy crude production, and is currently focusing on selling light and ultra-light crude oil through the Yanbu port.