Saudi Aramco is said to press Asian buyers to take more crude after price cuts

[Aramco office building in Houston, Texas, USA.]
Miguel Villagran

Saudi Aramco (ARMCO [https://seekingalpha.com/symbol/ARMCO]) is urging Asian refiners to lift additional crude cargoes next month after the state oil giant announced steeper-than-expected price cuts for October, Reuters reported Thursday, citing three industry sources.

The company held discussions with buyers during the APPEC energy conference in Singapore this week, encouraging them to take on more barrels, two of the sources said to Reuters. The push has delayed final supply allocations for October and may extend into next week, one source added. Aramco declined to comment.

On Monday, Aramco lowered the price of its flagship Arab Light crude to Asia by $1 per barrel from September levels, setting it at $2.20 a barrel above the Oman/Dubai average. The adjustment followed OPEC+’s weekend decision to raise output by 137,000 barrels per day in October. Since April, the producers’ alliance led by Saudi Arabia and Russia has expanded production targets by 2.5 million bpd, or about 2.4% of global demand.

Analysts say the move underscores OPEC+’s strategy of defending market share even at the expense of lower prices. Rising Middle East consumption has so far absorbed much of the additional output, but growing supply is expected to tip the global market into surplus and pressure Brent crude below $60 a barrel.

Saudi shipments to China, the kingdom’s top customer, slipped to about 43 million barrels in September from 51 million in August, trade data showed. Brent crude futures edged down to $67.38 a barrel on Thursday amid concerns about weakening U.S. demand and oversupply, though losses were capped by geopolitical tensions in the Middle East and Russia’s war in Ukraine.

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