For the first time in four months, Saudi Aramco has slashed prices of October crude oil exports for European and Asian buyers just a day after OPEC+ symbolically cut output for that same month by 100,000 bpd on global demand concerns.
Aramco cut prices of its Arab Light crude benchmark to Asia by $3.95 per barrel, and to European buyers by $2 a barrel, while prices for U.S. buyers saw no change, with the exception of heavier and lighter variants that will see a $0.50 per barrel increase, the Wall Street Journal reported.
The price cuts come after record high prices in September for Arab Light, which reached $9.80 over the Oman/Dubai average per barrel, while Arab Extra Light sold for $10.95 over per barrel that same month. With the price cuts, Asian buyers for October will pay $5.85 per barrel above the Oman/Dubai benchmark.
On Monday, OPEC+ endorsed a decision to cut the collective oil production target by 100,000 barrels per day (bpd) for October, despite Russia reportedly resisting such a move. The decision means returning targeted production levels to the August quotas.
The OPEC+ decision is largely symbolic for markets, sending a message that the cartel is ready to meet at any time and decide on any cuts it deems appropriate to “stabilize” oil prices.
The price cut also comes shortly after Moscow announced it would increase shipments of oil to Asia in response to the G7’s plan to implement a price cap on Russian oil beginning on December 5th, when the European Union ban on Russian seaborne oil goes into effect. The price cap would remain in place for two months.
Russia has already been redirecting crude oil from Europe to Asia since the U.S. and UK banned imports of Russian crude and fuels following the invasion of Ukraine.