Aramco Shifts Pricing Strategy as Shipping Costs Surge

For Asian buyers, the price of Arab Light will drop to a $5 per barrel discount against the Dubai/Oman benchmark next month, a $3 reduction that marks the lowest pricing level since June 2020. Conversely, European customers will pay $3 more per barrel across all grades starting in November, while prices for the United States remain locked at October levels.

This pricing adjustment serves as a direct offset to the soaring costs of navigating the Persian Gulf. To mitigate the threat of Iranian interference, Saudi Arabia has shifted to a costly ship-to-ship transfer model in the Gulf of Oman, where smaller vessels shuttle crude to waiting supertankers. The logistical burden has pushed freight rates for very large crude carriers to $1.3 million per day, a 43-fold increase from January’s $30,000 rate. According to data from Poten & Partners, freight now accounts for $33 of the delivered cost per barrel, surging from just $1.73 earlier this year. This expense structure now represents 27% of the total delivery price, compared to only 3% at the start of the year.