Saudi Arabia Cuts November Oil Prices for Asia to Deepest Discount Since 2020
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Saudi Arabia has cut the price of crude oil it will sell to Asian customers in November, surprising a market that had widely expected Saudi Aramco to raise prices.
Under the new pricing, Aramco’s flagship Arab Light crude will be sold to Asian refiners at $5 a barrel below the regional benchmark, compared with a $2 discount in October. That represents an additional $3-a-barrel cut and marks the deepest discount for the grade in Asia since June 2020.
The move ran counter to expectations among traders and refiners. A Reuters survey conducted before the announcement showed that market participants had anticipated November prices could rise by as much as $5 a barrel.
Aramco also lowered November prices for Arab Medium and Arab Heavy crude sold to Asia by $5 a barrel compared with October.
The cuts come as shipping costs from the Gulf to Asia have climbed sharply. The daily cost of chartering a very large crude carrier capable of transporting around two million barrels on the Gulf-to-China route reached about $1.2 million in early October, up from roughly $80,000 a day a year earlier.
Refining industry sources in Asia said the lower Saudi prices could help buyers absorb part of the steep increase in transportation costs, particularly as Asia remains the main destination for Saudi crude exports.
Notably, the lower November prices apply only to Asian customers and do not extend across all Saudi export markets. Aramco instead raised prices for crude sold to Northwest Europe by $3 a barrel, while keeping prices for US customers unchanged from October levels.
