Saudi Aramco Slashes Asian Oil Prices to Six-Year Low

Saudi Aramco, the state-owned oil giant, has slashed the price of its flagship Arab Light crude for Asian buyers to a six-year low. The November selling price will include a $5 per barrel discount to the regional benchmark, a steep drop from the $2 discount in October. This move surprised traders and refiners, who had anticipated a $5 per barrel increase according to a Bloomberg survey.

While Asian buyers face a significant price cut, European customers will see a $3 per barrel increase in November prices. Prices for U.S. buyers remain unchanged from October. The price reduction for Asia suggests Saudi Arabia may be aiming to boost sales in the region as oil flows from the Middle East recover following months of disruptions tied to the conflict surrounding Iran.

Despite ongoing attacks near the Strait of Hormuz, oil traffic through this critical waterway has rebounded in recent months. In mid-September, Saudi Arabia sold nearly 100 million barrels to Asian buyers, helping to prevent potential supply shortages. The kingdom has also restored much of the oil transport capacity through the East-West pipeline, which had been damaged in an earlier attack.

Saudi Aramco's official prices apply to oil supplied under long-term contracts, typically collected from Ras Tanura on the Arabian Gulf coast. Due to shipping risks in the Strait of Hormuz, the company has asked Asian refineries to request November volumes from alternative ports, including Yanbu and Sidi Kerir in Egypt.