Saudi Aramco cuts November crude prices for Asian buyers as soaring tanker rates and shipping disruptions reshape regional oil trade.
Saudi Arabia has sharply reduced its official selling prices for crude oil to Asian buyers for November, offering the deepest discount in six years as elevated shipping costs continue to pressure regional refiners.
Saudi Aramco set the November price for its flagship Arab Light crude at $5 a barrel below the average of the Oman and Dubai benchmarks. The price is $3 lower than October and represents the widest discount since June 2020.
The move surprised the market, with a Reuters survey showing traders had expected Saudi Arabia to raise the price by as much as $5 a barrel following gains in key Middle Eastern crude benchmarks.
Aramco also cut the November prices of Arab Medium and Arab Heavy crude for Asian customers by $5 a barrel.
Asian refiners said the reductions appeared aimed at offsetting unusually high transportation costs and helping Saudi Arabia maintain its position in the region. Freight rates have surged amid disruptions linked to the conflict involving the United States, Israel and Iran.
According to LSEG data, the daily cost of chartering a very large crude carrier capable of transporting about 2 million barrels from the Gulf to China reached around $1.2 million on Friday. That compares with approximately $80,000 a day a year earlier.
Industry sources said the lower Saudi crude prices could also compensate buyers for longer voyages and shipment delays. Some Saudi cargoes have faced delays at Egypt’s Sidi Kerir port, adding to transportation expenses.
Saudi Arabia has taken measures to keep oil exports moving despite disruptions around the Strait of Hormuz. Since September, Aramco has moved millions of barrels through ship-to-ship transfers outside the strategic waterway, helping oil flows through the strait return to levels seen before the conflict.
The kingdom also resumed crude loading at Yanbu on the Red Sea after a temporary suspension caused by a drone attack that disrupted its East-West oil pipeline.
Aramco adopted a different pricing strategy for European customers. The company raised its November official selling prices for northwest European buyers by $3 a barrel across all crude grades.
The contrasting moves underline Saudi Arabia’s efforts to protect its Asian market share while responding to higher freight costs, shipment disruptions and changes in global oil trade routes.
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