Saudi Arabia's decision to raise the price of its crude oil by $2 a barrel -- from $26 to $28 retroactive to April 1 -- appears to be part of a plan to restore pricing discipline within OPEC, oil analysts say.
At the very least, the Saudis are closing the gap between themselves and Iran , Iraq, and Kuwait, which have been selling crudes of comparable quality for several dollars higher, Monitor correspondent Harry Ellis reports.
The United States now buys slightly more than a million barrels of oil daily from Saudi Arabia, the largest foreign supplier to the US. Thus the American oil import bill will rise by something over $2 million a day.
This, according to the analysts, may add about half a cent a gallon to the retail price of gasoline, home heating fuel, and other petroleum products.
The price impact on Americans and the world would become more severe if other OPEC powers decided to raise the cost of their oil equivalently, keeping a pricing distance between themselves and the Saudis.