Saudi Arabia Tuesday reversed course on its pricing tactics with Asian buyers, announcing a significant increase in prices to a market that it had previously tried to woo with discounts.

In an e-mail to clients, Saudi Aramco said it was increasing its Asian prices for light oil delivery in April by $1.40 a barrel, after months of reductions in the Far East. The Saudi state-oil giant also raised prices in the U.S. by $1 a barrel.

The increases appeared larger than many previous Saudi price fluctuations. In the past, Aramco has raised or lowered its price by as little as a few cents.

The latest moves come as Saudi Arabia's prices and production levels are receiving heightened scrutiny after oil prices collapsed. The country is the world's largest oil exporter and the largest producer in the Organization of the Petroleum Exporting Countries, which has declined to cut production in the face of falling prices.

In November, Saudi Arabia surprised markets by slashing its prices in the U.S. as it sought to defend its share of the American market against a domestic production boom. The move contributed to a more than halving in global oil prices, as it was compounded by a Saudi-led decision to keep a production ceiling unchanged at the OPEC meeting in November.

But the Kingdom is now also facing competition in Asia from many fellow OPEC producers, whose sales have been displaced from the U.S.

Saudi Aramco sets its prices relative to regional benchmark crude-oil prices. It sells at different prices in different regions mainly to reconcile buyer demand with market fluctuations in those benchmarks. The price-setting process is typically a technical move with little impact on the broader market. But in recent months, amid a steep drop in global crude prices, the settings have been closely followed by market watchers looking for signs about Saudi oil policy.

Write to Benoit Faucon benoit.faucon@wsj.com

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