The price cut is designed to offset surging shipping costs to keep Asian refiners returning to Saudi barrels as competition grows from US, Iraqi, and Russian crude. Charter rates for a very large crude carrier from the Gulf to China now cost about $1.2M a day, up from $80,000 a year ago, meaning the $5 discount only partially covers the added freight expense. Aramco is leveraging its position in Europe, where Russian imports are banned, while discounting in Asia to protect market share as flows through the Strait of Hormuz recover.
Tuesday, October 20, 2026
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Saudi Aramco's 6 Year Low Asia Discount Triggers 1.9% Brent Drop
Commodities16 days ago
WTI crude fell 1.8% to $89.43 on Oct. 5 after the state oil producer in Riyadh lowered prices for Arab Light deliveries to the Far East by $3 per barrel from October. Saudi Aramco set the November official selling price for Asia at $5 per barrel below the Oman and Dubai average, the widest discount to the benchmark since June 2020. The decision caught markets by surprise, defying a Reuters survey that forecast a price increase of up to $5, and drove Brent prices down 1.9% to $100.32. In contrast, Aramco raised prices for Northwest Europe and the Mediterranean by $3 to $0.85 above Brent and held US prices steady at $4.60 above ASCI.
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