Saudi Arabia has raised oil prices for buyers in Asia to record levels, a sign the world's largest exporter sees the region's market remaining tight, reports Bloomberg.

Despite indications that slowing economies are starting to hit global demand for crude, state producer Saudi Aramco increased its Arab Light grade for next month's shipments to Asian refineries to $9.80 a barrel above the Middle Eastern benchmark. That's 50 cents than in August.

Still, traders and refiners had expected a bigger jump of $1.50, according to a Bloomberg survey in late July. That was before data emerged this week showing that Americans are driving less than they did in the summer of 2020, when pandemic travel curbs all but halted movement.

Aramco also increased all US grades, with prices for the region going up by 50 cents a barrel. It was the first change Aramco has made for American customers since May.

For Europe, the company lowered light crude varieties and raised medium and heavy types.

The decision came a day after OPEC+ -- led by Saudi Arabia and Russia -- responded to months of diplomatic efforts from the US for more oil with one of the smallest production increases in its history.

Oil still fell on Wednesday, with Brent dropping almost 4% to below $100 a barrel, following the US data and as production in Libya recovered.

Crude surged to around $130 a barrel in the wake of Russia's attack on Ukraine. It’s since dropped amid growing concern about the possibility of recessions in the US and Europe.

Crack Spreads Drop

Saudi Arabia sells most of its oil to Asia. China, India, South Korea and Japan are the biggest buyers.

Aramco's monthly pricing decisions are seen as a bellwether of the oil market and are often followed by similar moves from other major Persian Gulf producers.

The Saudi company mostly increased prices for heavier Asian grades more than those for lighter ones. Heavier varieties tend to be made into fuels such as diesel, while lighter oil yields more gasoline.

The margins, or crack spreads, that Asian refiners get from turning crude into gasoline have slumped almost 78% from record levels in late June. Those for diesel have fallen by around half as much, according to data compiled by Bloomberg.