Crude oil prices surged 25 cents a barrel Thursday after Saudi Arabia announced it was slashing oil supplies to customers in Japan, Europe and the United States in May, oil industry sources said.

The U.S. benchmark crude, West Texas Intermediate (WTI), traded at $19.99 for June delivery in Tokyo Thursday, up from its 19.74 dollars closing level on the New York Mercantile Exchange Wednesday.Saudi Arabia informed Japanese buyers that their May oil supplies would be cut by 40 percent.

Industry sources said supplies to major oil companies in the United States would be cut by 15 to 23 percent, and that some European oil companies had been notified of cuts of around 30 percent.

Saudi Arabia cut supplies to Japan by twice as much as to U.S. buyers because it can sell its oil for higher prices in the West, the sources said.

"I think they're taking advantage of the better market in the West," said a major oil company official.

Saudi Arabia's price formulas to customers in East Asia are linked to market values of the Oman and Dubai crudes from the Middle East, while U.S. buyers pay prices based on free market values of oil from Alaska's North Slope (ANS).