(Bloomberg) -- Saudi Arabia issued big price increases for its crude to Europe and the Mediterranean, while also unexpectedly lifting the cost of supplies to Asia, a move that risks stifling demand for the kingdom’s barrels.

State-owned Saudi Aramco raised the prices of all grades to the US, northwest Europe and the Mediterranean, for next month compared with July, according to a price list seen by Bloomberg. It also boosted its flagship Arab Light price to the key demand region of Asia, contrary to expectations in a Bloomberg survey.

The moves come after the kingdom said earlier this week that it would prolong a unilateral million barrel-a-day supply cut into August, while Russia also pledged to reduce its exports. Prior to that announcement, almost all of the traders and refiners surveyed by Bloomberg had expected no price change versus the previous month for Asia.

Aramco price increases for July led at least two large European refiners to crimp their Saudi orders, people familiar with the matter said at the time. Raising prices by 80 cents across all grades to northwest Europe and by $1.00-1.10 for Mediterranean destinations risks further suppressing demand for Saudi crude.

If the continued OPEC+ supply reductions deprive Asian buyers of barrels or if Middle Eastern cargoes are deemed too expensive, Asian refiners may look elsewhere for alternative supplies. Aramco sells about 60% of its crude to Asia, with its biggest buyers in China, Japan, South Korea and India. The exported cargoes are mostly under long-term contracts and pricing for these barrels are reviewed each month.

Read More: Saudis and Russia Extend Oil Supply Cuts to Prop Up Market

Official selling prices to Europe were all lifted by 80 cents a barrel, vastly outpacing increases to the US and Asia. Meanwhile, Arab Medium crude in the Mediterranean was set at a record premium of $3.20 a barrel, while Arab Light was the highest since September at $3.50 above its benchmark. 

Despite receiving the smallest price hike for Arab Light barrels, shipments to the US were set at the biggest OSP since at least 1999. The company lifted its flagship Arab Light crude for Asia by just 20 cents, to a premium of $3.20 a barrel.

--With assistance from Verity Ratcliffe.

(Updates with additional context throughout.)

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