Amidst the ongoing conflict involving Iran and repeated attacks by the Iranian-backed Houthi militia on Saudi Arabia, the Kingdom is striving to maintain oil shipments through the Strait of Hormuz. Reuters reported on the 13th, citing sources, that despite regional instability, Asian refineries—including those in Taiwan—have successfully secured Saudi crude oil for November delivery. However, due to heightened shipping risks in the Strait, Saudi Arabia has altered its sales strategy, even slashing the official selling price of its flagship crude to a six-year low.
Two individuals familiar with the matter revealed that Saudi Arabia has sold November-loading crude to refiners in Taiwan and India using a delivery model where the seller assumes responsibility for transport—essentially delivering directly to the port. Three other sources indicated that Chinese state-owned and private refineries have also purchased at least 12 million barrels of Saudi crude through similar arrangements.
Sources stated that the transaction prices for some of the crude were approximately $20 per barrel higher than the official November selling price. These deals were concluded through a tender held last week by the state-owned oil company Saudi Aramco, as well as through private negotiations. Saudi Aramco declined to comment.
Saudi Arabia typically announces its official selling prices at the beginning of each month and requires long-term contract buyers to declare their purchase volumes for that month. Two sources noted that security risks stemming from the conflict involving Iran made buyers reluctant to charter tankers to enter ports inside the Strait of Hormuz for loading; this forced Saudi Arabia to divert some crude—originally intended for transport through the Strait—to the spot market instead.
To attract buyers and offset soaring freight costs, Saudi Aramco set the official selling price for its flagship “Arab Light” crude at $5 per barrel below the average price of Oman and Dubai crude benchmarks—a six-year low. However, Saudi Aramco has maintained its crude oil quotas for shipments from the Red Sea port of Yanbu and the Egyptian port of Sidi Kerir.