Saudi Arabia Slashes November Oil Prices for Asia to Six-Year Low

Saudi Arabia has slashed its November official selling prices (OSPs) for crude oil to Asian buyers to their lowest point in six years. The state-run oil giant Saudi Aramco set the November OSP for its Arab Light crude at $5 per barrel below the average of Oman and Dubai crude prices, marking a $3 per barrel reduction from October. This discount is the widest since June 2020 and defied market expectations of a $5 per barrel increase.

The move comes as Saudi Arabia aims to bolster its market share amid soaring freight costs and regional shipping disruptions. Freight rates for very large crude carriers from the Gulf to China surged to about $1.2 million per day on October 2, compared to around $80,000 a year earlier. Refining sources suggest the OSP cuts are partly aimed at compensating buyers for these higher transportation costs.

In contrast, Saudi Aramco raised November OSPs for all grades sold to northwest Europe by $3 per barrel and kept prices unchanged for US buyers. The lower Asian prices also reflect efforts to offset longer voyages and loading delays affecting crude exports through Egypt’s Sidi Kerir terminal. Since September, Aramco has used ship-to-ship transfers outside the Strait of Hormuz to maintain exports, while also resuming loading at Yanbu following an earlier disruption to its East-West oil pipeline.