Saudi Arabia cut oil prices for customers in Asia as coronavirus lockdowns and sagging economies cool energy demand in the two regions.
State-controlled Saudi Aramco lowered its key Arab Light grade for October’s shipments to Asian refineries to $5.85 a barrel above the Middle Eastern benchmark. That was a decrease of almost $4 from the record-high set for this month.
The move was largely in line with traders’ expectations and follows a 25% drop in Brent crude futures in the past three months to below $95 a barrel.
It also came a day after OPEC+, the producers group that Riyadh leads along with Russia, agreed to a surprise, albeit token, production cut for October. The 23-nation alliance is seeking to stabilize oil markets amid faltering economies and rising inflation. In China, the world’s biggest crude importer, the spread of virus lockdowns is hurting manufacturers and retailers.
Aramco lowered all grades bound for Northwest Europe and the Mediterranean, most of them by $2 a barrel. The company raised pricing for US buyers by 50 cents, except for Arab Light, which was kept unchanged.
Saudi Arabia sells most of its oil under long-term contracts to Asia. China, Japan, South Korea and India are the biggest buyers.
