Saudi Arabia Slashes November Oil Prices for Asia
Saudi Arabia has made an unexpected move by cutting its November crude oil prices for Asia, according to a pricing document released on Oct 5. The kingdom set the November Arab Light crude oil official selling price (OSP) to Asia at US$5 a barrel below the average of Oman and Dubai prices, marking a US$3 decrease from the previous month. This discount is the widest since June 2020, according to Reuters data. The reduction contrasts with market expectations of a US$3 a barrel hike, as indicated by a Reuters survey aligned with gains in Middle Eastern benchmarks.
State oil company Saudi Aramco also implemented deeper cuts of US$5 a barrel for the November OSPs of heavier grades, Arab Medium and Arab Heavy, sold to Asia. This strategy follows reports that Aramco has been considering discounts for oil loaded off Oman to offset record freight rates, aiming to safeguard its market share amid regional conflicts affecting exports.
In contrast, Aramco raised the November OSPs for north-west Europe by US$3 a barrel across all grades after resuming exports from the Red Sea port of Yanbu. Prices for buyers in the United States remained unchanged. Saudi Arabia and other OPEC+ members had agreed on Oct 4 to maintain steady oil production targets for November, suggesting that further output policy adjustments are unlikely until next year.