1 hr ago
Saudi Arabia Cuts Asia Oil Prices to Win Market Share
Saudi Aramco sells oil to buyers in different parts of the world.
It lowered the price of one kind of oil for Asian buyers in November.
The discount is bigger than it was in October, and lower than traders expected.
Aramco raised prices for Europe and kept US prices the same.
More oil is moving through the Strait of Hormuz than in recent months, but shipping there is still risky.
Saudi Arabia has also repaired much of a pipeline that carries oil toward the Red Sea.
Aramco is offering Asian buyers several places to collect their oil in case the strait stays closed.
The price cut may help Saudi Arabia sell more oil in Asia as regional producers compete for buyers.
Saudi Aramco cut its November Arab Light price for Asian buyers to $5 a barrel below the regional benchmark, its lowest level in six years.
The discount widened from $2 a barrel in October, despite traders and refiners expecting a $5 increase, according to a Bloomberg survey.
Aramco raised November prices to Europe by $3 a barrel and left US prices unchanged.
Oil flows through the Strait of Hormuz have rebounded, while the East-West pipeline has been restored to more than 80% of capacity.
Aramco asked Asian refiners to nominate volumes for pickup at Persian Gulf, Red Sea and Mediterranean ports in case the Strait of Hormuz remains closed.
- Who
- Saudi Aramco, Saudi Arabia’s state-owned oil producer.
- What
- Cut its November Arab Light price for Asian buyers to $5 a barrel below the regional benchmark.
- Where
- Asian markets, with alternative pickup locations including the Persian Gulf, Yanbu on the Red Sea and Sidi Kerir in the Mediterranean.
- When
- The pricing applies to November; the article does not state its publication date.
- Why
- The unexpected cut may be intended to boost sales in Asia as Persian Gulf producers compete for market share.
Competitive pricing and supply
Shipping risks and disruption
Saudi price cut
Competitive pricing and supply
The lower price may help Saudi Arabia increase sales in Asia amid competition for market share.
Shipping risks and disruption
Traders and refiners had expected a price increase, and regional shipping remains risky and costly.
Oil transportation
Competitive pricing and supply
Hormuz oil flows have rebounded, and the East-West pipeline has been restored to more than 80% of capacity.
Shipping risks and disruption
Attacks on ships continue, customers are avoiding the Strait of Hormuz, and Aramco is planning for a possible continued closure.
Key facts
- November Arab Light price for Asia
- $5 a barrel below the regional benchmark
- October Arab Light discount
- $2 a barrel below the regional benchmark
- Trader expectation
- A $5-a-barrel increase from October
- November price change for Europe
- Up $3 a barrel
- November price change for the US
- Unchanged from October
- East-West pipeline restoration
- More than 80% of capacity
- Middle East crude exports
- JPMorgan estimated they were at 98% of pre-war levels
Sources
Related news
Saudi Arabia Cuts November Arab Light Crude Prices for Asia
Saudi Arabia boosts crude shipments through Strait of Hormuz
Oil prices slip as Saudi exports show signs of recovery
Saudi Arabia Turns to Sohar Transfers Amid Hormuz Constraints
Saudi Arabia Seeks Oil Export Alternatives After Pipeline Attack
Oil Prices Slide as Saudi Export Routes Ease Supply Fears
Sensex and Nifty Open Higher as Oil Prices Ease
Gift Nifty Signals Cautious Relief Rally for Indian Markets
Ghalibaf Says Hormuz Stays Closed Until US Meets Conditions
Iran Oil Minister Resigns as US Blockade Pressures Exports
