Saudi Arabia unexpectedly cuts November oil prices to Asia to 6-year lows

Business Recorder reported that Saudi Arabia unexpectedly lowered its November crude prices for Asian buyers to their weakest levels in six years, according to a pricing document released on Monday. Its Arab Light price for Asia was reduced by $3 from the previous month, to a level $5 a barrel under the Oman and Dubai average. The cut defied a Reuters survey that had pointed to a rise of up to $5 a barrel.

Reuters figures place the November discount at its widest level since June 2020, while Aramco cut the heavier Arab Medium and Arab Heavy grades for Asia by $5 a barrel. Three Asian refining sources said the cuts were aimed at offsetting higher freight costs. Hiring a very large crude carrier for the Gulf to China run cost $1.2 million daily on Friday, versus roughly $80,000 per day twelve months earlier. The lower prices could also offset the longer wait and voyage for Saudi crude shipped from Egypt's Sidi Kerir port, where loadings have been delayed.

Aramco lifted its November pricing for northwest Europe and the Mediterranean, adding $3 per barrel on every grade, while US buyers saw no change. Since September, Aramco has moved millions of barrels using ship-to-ship handovers beyond Hormuz, returning flows through the waterway to pre-conflict levels.