Saudi Crude Cuts
Saudi Arabia slashes July crude prices for Asia and West due to weakening demand.
Anonymous
Saudi Aramco cut official selling prices for July crude exports for a second straight month, lowering its Arab Light grade to a premium of $9.50 per barrel above Oman/Dubai benchmarks for Asia, down from a $15.50 premium in June. The reductions—$6 per barrel for other Asia-bound Saudi grades and smaller cuts for U.S., Northwest Europe, and the Mediterranean customers—reflect weakening demand signals, especially from China, as refiners scale back and draw down inventories. Several reports tied the move to pressure on refining margins and softer spot activity in Asia, with Goldman Sachs estimating global demand fell roughly 4% to 5% in April amid reduced flows through the Strait of Hormuz. While near-closure conditions at Hormuz continue to choke Persian Gulf supply and tighten markets, Saudi Arabia is rerouting some exports via its East-West pipeline to the Red Sea port of Yanbu, though shipping constraints remain. The price cut also follows OPEC+ agreeing to raise July output for a fourth consecutive month, a step widely viewed as largely symbolic given ongoing Middle East disruptions and damage to parts of Russia’s energy infrastructure.
Key Points
1
Saudi Aramco didn’t just cut Asia grades: it also lowered prices for Northwest Europe and the Mediterranean by $10 per barrel above benchmarks, while cutting U.S.-bound prices by $2 per barrel.
2
The OPEC+ July output increase came after the UAE abruptly exited OPEC at the end of April, a development traders linked to broader uncertainty around how the cartel and its partners manage supply.
3
In financial markets coverage, WTI and Brent had already fallen on the news: Oil — US Crude was down about 3.8% over the prior month and had a “Sell” 1-day technical bias, while Oil — Brent Crude was down about 9.2% and showed a more cautious “Hold” stance in the short term.
4
OPEC+’s decision was widely framed as largely symbolic partly because the Strait of Hormuz historically carried about a fifth (around 20%) of global oil supply—while the Kremlin’s energy infrastructure damage was also cited as an additional supply tightener.
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