Saudi Aramco Cuts November Crude Prices for Asia to a Six-Year Low, Easing Costs for Indian Refiners

Saudi Arabia has handed Asian refiners, including India's, an unexpected discount. State producer Saudi Aramco cut the official selling price of its flagship Arab Light crude for November loadings to Asia by $3 a barrel, according to a pricing document released on Monday. The grade will now sell at $5 below the average of the Oman and Dubai benchmarks, the widest discount since June 2020.

The move ran directly against market expectations. Refiners surveyed ahead of the announcement had expected Aramco to raise prices by as much as $5 a barrel, in line with recent gains in Middle East benchmark grades.

Bigger cuts for heavier grades

The reductions went deeper further down the barrel. Aramco cut November prices for Arab Medium and Arab Heavy sold to Asia by $5 a barrel each. Those heavier, more sulphurous grades are a staple for complex refineries in India, which are built to process cheaper, lower-quality crude into fuels.

At the same time, Aramco raised its November prices for northwest Europe by $3 a barrel across all grades and kept prices for US buyers unchanged.

Paying buyers for the cost of the route

The split between Asia and Europe reflects the new geography of the Gulf oil trade since the US-Israeli war with Iran disrupted flows through the Strait of Hormuz. Refining sources in Asia said the cut appears designed to compensate buyers for the cost of getting Saudi oil to them.

Those costs have exploded. Hiring a very large crude carrier, which hauls about 2 million barrels, from the Gulf to China on a time-charter basis cost about $1.2 million a day on Friday, compared with roughly $80,000 a day a year ago. Aramco had reportedly been considering discounts for oil loaded off Oman to protect its market share, and lower prices may also make up for delays and longer voyages on cargoes routed through Egypt's Sidi Kerir terminal.

European buyers, by contrast, can now be served more directly after Saudi Arabia resumed loadings at its Red Sea port of Yanbu, following a brief halt when a drone attack shut its East-West pipeline. Since September, Aramco has also moved millions of barrels through ship-to-ship transfers outside Hormuz, helping push flows through the waterway back towards pre-conflict levels.

What it means for India

For India, which imports more than 85% of the crude it refines and counts Saudi Arabia among its largest suppliers, the cut is a modest but timely relief. Indian refiners such as Indian Oil, Bharat Petroleum, Hindustan Petroleum and Reliance Industries buy Saudi barrels under term contracts priced off these monthly official selling prices, so the lower differential flows straight into their November crude bills.

It will not undo the bigger problem of benchmark oil prices hovering above $100 a barrel, nor the sharp rise in freight. But a $3 to $5 a barrel reduction on term volumes can add up to a meaningful saving over a month, helping refiners' margins at a time when retail fuel prices remain politically sensitive and the rupee is trading weaker than 96 to the dollar.

The timing also matters for policymakers. The Reserve Bank of India's rate-setting committee began its three-day meeting on Monday, with expensive crude among the main reasons economists expect a rate hike. Cheaper Saudi term barrels will not change that calculation on their own, but they ease one source of pressure on the country's import bill.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.