MediumVI Energy Politics & Supply Security5 October 2026, Monday

Aramco cuts November Asia price to deepest discount in six years

Saudi Aramco cut its official selling price for Arab Light to Asia for November loadings by $3 a barrel, to $5 below the Oman/Dubai average. That is the widest discount since June 2020, and the market had expected a $5 increase.

Location: DHAHRAN

According to The National, Aramco widened the Asia discount from $2 in October to $5, raised its price for Europe by $3 and left the US price unchanged. Arabian Post reports that Asian prices for Arab Medium and Arab Heavy were also cut by $5 each. Aramco asked Asian refiners for separate November nominations for Gulf ports, Yanbu on the Red Sea and Sidi Kerir on Egypt's Mediterranean coast. The same report said daily charter rates for very large crude carriers (VLCCs) have risen to about $1.2 million, against roughly $80,000 a year ago.

The cut shows that delivered cost, not price, is the constraint. Record freight and longer routes are raising delivered costs for Asian buyers, and Aramco is conceding on its official price to defend market share. Kpler and Vortexa data cited by Oilprice show Saudi exports rising from 4.2 million barrels a day in August to about 6.6 million in September. Gulf crude exports reached 91% of pre-war levels in September, but refined product exports only 60%.

Sources differ on the scale of the recovery. A JPMorgan estimate cited by The National puts Middle East shipments at about 98% of pre-war levels. According to Oilprice, Gulf exports excluding Iran stood at 81% of pre-war levels in September. The gap stems largely from whether crude and refined products are counted separately.

Talay assessment

Bottom line

Aramco's surprise cut shows Saudi Arabia wants to convert the export flexibility it has gained through pipelines and alternative ports into market share. Even with futures near $100, Saudi oil delivered to Asia is becoming relatively cheaper. The most likely path is a sharper discount war among Gulf producers for the Asian market.

Likely effects

Asian refinersPositiveWeeks
The deep discount offsets part of the record freight bill. Asian buyers could turn to Saudi barrels and shift volumes away from suppliers dependent on the Strait.
Intra-Gulf competitionNegative1–6 months
Producers reliant on the Strait, such as Iraq and Kuwait, must compete with the Saudi discount in the same market, putting pressure on them to cut their own official prices.
Europe and TürkiyeNegativeWeeks
The $3 increase for Europe and the Mediterranean means Saudi oil arriving via Sidi Kerir and Yanbu is getting dearer for regional refiners, including Türkiye's.

Possibilities, ranked

1
Discount war spreads50%
Iraq's SOMO and Kuwait cut November–December prices to Asia, and the Dubai structure weakens.
Watch: Iraq's and Kuwait's November official selling price announcements
2
One-off adjustment35%
If freight eases, Aramco narrows the discount in December and the cut stays a freight offset.
Watch: VLCC daily charter rates and Aramco's December price announcement
3
Reversal on a supply shock15%
A new attack on a pipeline or port interrupts Saudi exports and the discount is quickly withdrawn.
Watch: Reports of disruption to the East-West pipeline or Yanbu loadings

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Market reaction

Indicators affected

Arab Light Asia discount (November)▼ −$5/bbl
Saudi exports (September)▲ ≈6.6m b/d
VLCC daily charter rate▲ ≈$1.2m