Despite rising tensions across the Middle East that have strengthened the overall market, Saudi Arabia has decided to hold the price of its flagship crude grade steady for next month. According to the official pricing list from Saudi Aramco, the state-owned energy giant has left the October price for Arab Light crude destined for Asia unchanged, maintaining a discount of $2 per barrel against the benchmark. This decision diverges from market expectations, as a survey of traders and refiners by media outlets had shown a median forecast of a $5 per barrel increase.
The pricing move comes as the oil market has been severely disrupted by a regional war triggered in February when the US and Israel launched strikes on Iran, causing damage to key facilities and largely choking off the vital Strait of Hormuz shipping lane. Since the outbreak of the conflict, Gulf producers have struggled to guarantee supplies to customers, with crude prices surging more than 30% and refined product costs also climbing sharply.
As detailed in a document reviewed by media, the prices set by Saudi Aramco apply to cargoes loaded at the Ras Tanura terminal within the Persian Gulf. Buyers are also being asked to inform Saudi Aramco of how much Arab Light crude they wish to withdraw from the Yanbu or Sidi Kerir ports, should the Strait of Hormuz remain closed to shipping.
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