Saudi Aramco cut pricing for its main crude grades to buyers in Asia as the world’s biggest oil exporter raises output ahead of sanctions that threaten deeper cuts in shipments from Iran. Saudi Arabian Oil Co, as the state-owned company is officially known, cut October pricing for Light crude to Asia by 10 cents a barrel to $1.10 above the regional benchmark, it said in a statement. The company had been expected to raise the pricing by 15 cents a barrel, according to a survey of traders. Aramco also cut pricing for its Medium and Heavy crudes to Asia. Opec, led by Saudi Arabia, agreed in June to ease supply cuts and is ramping up production to temper prices, which approached $80 a barrel. The US is re-imposing sanctions on Iran, third-largest producer in the Organization of Petroleum Exporting Countries, raising concerns over potential shortages and dwindling spare capacity. European buyers are already shunning Iranian oil to avoid running afoul of US constraints, which take effect in November. The Saudis increased production in June to more than 10mn bpd and have maintained output at this higher level. The kingdom also raised exports in both June and August. Middle Eastern producers compete in Asia with cargoes from Latin America, North Africa, Russia and the US. Aramco raised pricing on all grades to Northwest Europe and the Mediterranean region for October, according to the statement. It increased pricing for most grades to buyers in the US, where oil in storage fell at the end of August. Companies in the Gulf region sell mostly under long-term contracts to refiners. Most of the Gulf’s state oil producers price their crude at a premium or discount to a benchmark. By setting its official selling prices, or OSPs, either higher or lower from month to month, Aramco signals how strong or weak it views demand globally. Cutting prices can be seen as an indication that a country wants to supply more crude.
Saudi Aramco has cut pricing for Asian buyer ahead of US sanction on Iranian oil, with October Light crude to Asia selling at a $0.10 discount per barrel to $1.10 above the regional benchmark. The world's largest oil exporter also cut pricing for its Saudi Aramco crudes in Asia, after increasing production to over 10 million bpd. In contrast, Aramco raised pricing to Northwest Europe and the Mediterranean, as well as the US, in October for all grades