By: OrePulse

Saudi Aramco set its official selling price for Arab Light crude sold to Asia in November at $5 a barrel below the regional benchmark, the steepest discount to the region in six years. The November differential marks a sharp pivot from October, when the discount stood at $2 a barrel, and the size of the cut ran counter to trader expectations of a price increase for the month.

The state-controlled producer moved in the opposite direction in other markets. It raised its November official selling price for European buyers by $3 a barrel while holding prices for United States customers unchanged from October.

Aramco also told Asian refiners buying its crude that they could choose to collect their November cargoes from Gulf ports, the Red Sea port of Yanbu, or Mediterranean loading terminals, citing the possibility that disruption to the Strait of Hormuz could continue.

JPMorgan Chase estimated that Middle East crude exports have climbed back to roughly 98% of the volumes seen before the regional conflict, even as shipping costs remain elevated because of a shortage of available tankers and continuing instability in the region.

Aramco is the world's largest oil exporter, and its monthly official selling prices for Arab Light and other grades are closely tracked across the industry because they set the benchmark differential used in term supply contracts with Asian refiners. A deeper discount lowers the price Asian buyers pay relative to the regional crude benchmark, while a narrower or higher differential raises it.

The November pricing move comes as Gulf producers work to rebuild export volumes and defend market positions in Asia, the world's largest crude-importing region, following disruption linked to the regional conflict. Aramco's decision to cut the Asia price sharply, while raising the European price and holding the US price flat, points to a strategy that favors Asian market share even as it takes a firmer line in other regions.