Saudi Arabia unexpectedly cut November crude prices for Asian buyers to their lowest in more than six years, a pricing document showed Monday. State oil company Aramco set the November official selling price for Arab Light to Asia at $5 a barrel below the average of Oman and Dubai prices, down $3 from October — the widest discount since June 2020, according to Reuters data.
The move ran directly against expectations: traders and refiners surveyed by Reuters and Bloomberg had expected an increase of about $3 a barrel, in line with gains in Middle Eastern benchmarks. Aramco made deeper cuts of $5 a barrel for the November OSPs of its heavier grades, Arab Medium and Arab Heavy, sold to Asia. Prices for northwest Europe and the Mediterranean were instead raised by $3 a barrel across all grades after Aramco resumed exports from its Red Sea port of Yanbu; US prices were left unchanged.
The cuts appear aimed at compensating buyers for elevated freight costs, three Asian refining sources said. The cost of booking a very large crude carrier from the Gulf to China on a time-charter basis was $1.2 million a day on Friday, according to LSEG data — against about $80,000 a day a year ago. Since September, Aramco has sold millions of barrels through ship-to-ship transfers outside the Strait of Hormuz, pushing flows through the waterway back toward pre-conflict levels.
The pricing tells the demand story more honestly than the quotas: with Middle East exports recovering, Riyadh is choosing to protect its share of its most important market by eating the war-risk freight premium itself rather than passing it to refiners.