Saudi Arabia Slashes August Crude Prices for Asia as Gulf Supplies Rebound — Update

By Giulia Petroni

Saudi Arabia, the world's top oil exporter, sharply cut the price of its flagship crude grade for Asian buyers, selling it at a discount for the first time in years as Gulf supplies return to global markets.

State producer Saudi Aramco on Monday lowered the official selling price for August shipments of its Arab Light crude to Asia--the largest market for Middle Eastern oil--by $11 a barrel to a discount of $1.50 a barrel to the Oman/Dubai benchmark, down from a premium of $9.50 a barrel for July cargoes.

It is the first time Arab Light to Asia has been sold at a discount of $1.50 a barrel or more since Saudi Arabia's price war with Russia in 2020.

Official selling prices are monthly rates set by national oil companies for term-contract customers and are typically pegged to regional crude benchmarks. The prices reflect demand from refiners and competition among exporters, making them a closely watched gauge of market conditions in key consuming regions.

The move comes as shipping traffic through the Strait of Hormuz--a critical choke-point that used to carry about a fifth of the world's oil supply--gradually recovers, entering a new normal of 30 to 60 ships a day, below prewar levels but enough to ease pressure on global markets.

Major Gulf producers are now ramping up output and exports, with Saudi crude flows returning to the strait after months of being rerouted to the Red Sea port of Yanbu. According to Kpler data, fresh loadings are resuming at Aramco's Ras Tanura complex, pointing to a broader normalization of exports from inside the Gulf rather than just clearing backlog cargoes.

Saudi Arabia and other OPEC+ allies on Sunday agreed to raise oil output by 188,000 barrels a day in August, marking a fifth consecutive monthly increase. Previous hikes were seen as largely symbolic, as the closure of the Strait of Hormuz and damage to key energy infrastructure in the region had forced major exporters to curb output and shipments.

Aramco slashed August prices for its other crude grades sold to Asia by $11 a barrel. Prices for grades sold to Northwest Europe and the Mediterranean were reduced by $15 a barrel, while U.S. customers saw an $8-a-barrel decrease.

Other major oil producers in the Gulf region also cut official selling prices for Asian customers. Abu Dhabi National Oil Co. lowered its July price for its sour Murban grade by $2.96, according to Argus Media, while Iraq's state-owned Somo cut its July prices for Basrah Medium and Heavy--the country's main export grades--by $4 a barrel.

Write to Giulia Petroni at giulia.petroni@wsj.com

(END) Dow Jones Newswires

July 06, 2026 11:11 ET (15:11 GMT)