Saudi Arabia has set the official selling price of "Arab Light crude oil" for Asian buyers for November at $5 below the average price of Oman/Dubai oil. This price reduction is down $3 from October and is recognized as the largest discount since June 2020. Meanwhile, prices for customers in Northwestern Europe and the Mediterranean region have increased.
Price Forecast Analysis
Analysts participating in a Reuters survey had predicted that the official selling price of Saudi oil for November would increase by up to $5 per barrel. This prediction aligns with the upward trend in Middle Eastern oil benchmark prices. In this context, the state-owned Saudi Aramco has also reduced the official selling prices of heavier oil types, namely "Arab Medium crude oil" and "Arab Heavy crude oil," by $5 per barrel for supply to Asia.
Efforts to Maintain Market Share
Sources announced last week that Aramco is working to maintain its market share following supply disruptions caused by the U.S. and Israeli regime's war against Iran, considering discounts on oil sales to offset unprecedented maritime transportation costs for buyers. Three sources in the Asian refining sector also indicated that the goal of reducing official selling prices is to compensate for high transportation costs for buyers.
Data from the London Stock Exchange Group (LSEG) showed that the cost of booking a Very Large Crude Carrier (VLCC) with a capacity of 2 million barrels from the Gulf to China reached $1.2 million per day on Friday (October 1). This figure was about $80,000 per day during the same period last year.
Price Changes for Buyers in Different Regions
Meanwhile, Saudi Aramco has increased the official selling prices of all types of crude oil for supply to customers in Northwestern Europe by $3 per barrel for November. Prices for American buyers, however, have remained unchanged. These actions are taken to adjust the market and respond to changes in prices and transportation costs.
