Riyadh: Saudi Arabia has significantly reduced the price of its flagship crude oil for Asian buyers, marking the largest monthly price cut in at least 25 years as oil supplies through the Strait of Hormuz continue to normalize.
State-owned energy giant Saudi Aramco has lowered the official selling price (OSP) of its Arab Light crude for August deliveries by $1.10 per barrel, bringing the price to $1.50 below the regional benchmark for Asian markets. The latest adjustment places the pricing differential at its lowest level since 2020 and represents the biggest monthly reduction since at least 2000.
The price revision comes after an interim peace agreement between the United States and Iran, which helped restore oil shipments through the Strait of Hormuz, one of the world’s most important energy trade routes. As exports resumed, the increased availability of crude oil intensified competition among major producers, particularly in the Asian market.
According to oil analyst Ahmed Mehdi of Renaissance Energy Advisors, the price cut reflects an oversupply of prompt cargoes rather than an attempt by Saudi Arabia to gain market share. He said the normalization of shipping activity through the Strait of Hormuz following recent regional disruptions has increased supply and placed downward pressure on prices.
Despite Saudi Arabia’s aggressive price reduction, global crude oil prices remained mixed as stronger demand for refined petroleum products helped offset some of the market pressure.
Saudi Arabia has frequently adjusted oil prices and production levels to stabilize market conditions. The Kingdom is also gradually increasing crude output under the production agreements reached by the OPEC+ alliance.
