Saudi Arabia cuts August crude oil prices for Asia by largest margin in at least 26 years

en.Wedoany.com Reported - Wedoany News, July 6 - Saudi state-owned oil company Saudi Aramco announced its official selling prices for August, cutting the price of Arab Light crude for Asia by $11 per barrel to a discount of $1.50 per barrel against the Oman/Dubai average. This reduction far exceeded market expectations of $8 per barrel, marking the largest single-month drop in official selling prices since at least 2000 and the first time this grade of crude has been sold at a discount since the 2020 price war.

This significant price cut directly reflects the impact of a surge in global crude supply on the market. After the US and Iran reached a provisional agreement in mid-June, the Strait of Hormuz gradually resumed navigation, allowing a large volume of crude oil previously stranded due to conflicts to re-enter the market. Meanwhile, after the UAE left OPEC, its production approached historical highs, Saudi exports have recovered to about 90% of pre-conflict levels, and major OPEC+ producers have agreed to continue modest production increases in August. The rapid recovery in supply has intensified competition in the physical crude market, with Brent crude futures erasing all gains made during the conflict period, falling to around $72 per barrel.

Despite the substantial price cut, some Asian crude buyers indicated that Saudi prices remain higher than spot supplies available for immediate purchase from other regional producers. This suggests that if market-available crude supply continues to remain high, Saudi Arabia may face further pressure to cut prices. On the same day, Saudi Aramco also lowered crude prices for Europe and the US, with reductions of $15 per barrel and $8 per barrel, respectively.