By Giulia Petroni
Top oil exporter Saudi Arabia sharply cut the price of its main oil grade for Asia as demand slows, even as the near-closure of the Strait of Hormuz continues to choke off supplies out of the Persian Gulf and tighten global markets.
State oil producer Saudi Aramco on Monday set the official selling price for July loadings of its Arab Light crude to Asia--the largest destination for Middle Eastern crude--at $9.50 above the Oman/Dubai regional benchmarks, down from a premium of $15.50 a barrel in June.
Official selling prices are monthly rates set by national oil companies for term-contract customers and are typically benchmarked against regional crude markers. While crude futures and physical oil prices have risen sharply since the Iran war began in late February, Aramco's selling prices reflect demand from refiners and competition from rival exporters, making them a gauge of market conditions in key consuming regions.
The steep cut comes as China, the world's largest crude oil buyer, drastically lowered crude imports as weaker refining activity and lower refined-product exports weigh on domestic operations.
Goldman Sachs estimates global demand fell 4% to 5% in April due to reduced flows through the Strait of Hormuz, citing weaker consumption in China and Western Europe. The estimate is based on refinery runs, third-party estimates and other indicators of consumption trends, including changes in retail fuel prices.
Saudi Arabia's price cut also comes after the United Arab Emirates abruptly exited the Organization of the Petroleum Exporting Countries at the end of April. The U.A.E. was OPEC's third-largest producer and has in recent years wanted to boost its output beyond levels allowed by the cartel's quota system.
On Sunday, OPEC and its allies agreed to raise oil output again in July, a fourth consecutive monthly increase. The move, however, is widely seen as symbolic, with the war in the Middle East continuing to disrupt flows through the Strait of Hormuz--a critical choke-point that used to carry about a fifth of the world's oil supply--while Russia has sustained significant damage to its energy infrastructure.
With shipping through Hormuz severely constrained, Saudi Arabia has been rerouting crude exports via its East-West pipeline to the Red Sea port of Yanbu.
Prices for other grades of Saudi oil sold to Asia were also cut by $6 a barrel. Aramco slashed prices for grades sold to Northwest Europe and the Mediterranean by $10 a barrel, while U.S. customers saw a $2-a-barrel decrease.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
June 08, 2026 08:21 ET (12:21 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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