Saudis cut oil prices for Asia as Opec+ ramps up output
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State producer Saudi Aramco is lowering the price for its flagship crude to its biggest market by US$1 a barrel for shipments in October.
PHOTO: AFP
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DUBAI – Saudi Arabia will cut prices on all its crude grades for buyers in Asia, as well as on most barrels to other regions, after Opec+ said it will continue to ramp up output, defying widespread expectations of a looming oversupply.
State producer Saudi Aramco is lowering the price for its flagship Arab Light crude to its biggest market by US$1 a barrel for shipments in October, according to a price list seen by Bloomberg. The grade will sell for a premium of US$2.20 a barrel to the regional benchmark in October, lower than expected by refiners and traders.
The company was expected to decrease the price by 50 US cents a barrel, according to a survey of refiners and traders.
Saudi Arabia and its allies in the Organisation of Petroleum Exporting Countries agreed over the weekend to press on with raising production further, following accelerated hikes during the past few months. The alliance is seeking to reclaim market share it had ceded to rivals, and in the process may be breaking with its traditional aim of defending crude prices.
Aramco also is cutting prices on all of its crude grades to Europe by 80 US cents a barrel, and lowering most of the barrels set for the US. The only grade unchanged is Arab Light to the US, which is set at a premium of US$4.20 a barrel in October, flat to September.
The larger-than-expected price cut for Asia is surprising and sends a potentially bearish signal, according to traders dealing in oil in that region.
Aramco’s crude marketers are currently meeting refiners and traders at Asia’s largest energy gathering in Singapore, where they are likely discussing contract volumes for the coming year.
Aramco previously raised Asia’s prices for August and September in the face of bigger Opec+ quota hikes, indicating confidence that summer demand remained strong. That flush market may begin to wane as added supply comes online.
Crude in London has slipped about 12 per cent in 2025 to trade near US$66 a barrel. UBS Group sees prices dipping to US$62 a barrel by the year end, while Goldman Sachs Group anticipates a drop to the low US$50s in 2026.
Still, the Opec+ supply increases during the past few months have not yet caused a build-up of inventories in the West, where the world’s key oil price benchmarks are located.
The decrease in Aramco’s selling prices after two consecutive months of hikes for buyers in Asia may come as a relief for refiners fretting about the potential for weakening margins amid a potential oversupply.
Healthy summer demand supported by travel in the US and Europe and domestic needs in the Middle East propped up prices in the past months, though that is set to wane as winter approaches. BLOOMBERG
