Aramco's August Price Cuts Signal Intensifying Battle for Asian Market Share, Kpler Says

Saudi Aramco slashed its official selling prices for Asia by $11 per barrel in August, a decision that underscored deepening concerns over a global crude supply glut as regional production recovers faster than demand, Kpler strategists said in a note on Tuesday. Muyu Xu, senior Crude Oil Analyst at Kpler, said the sharp reduction, which sets the flagship Arab Light grade at a discount to the Oman/Dubai average for the first time since December 2020, highlights the intensifying competition for market share among Middle Eastern producers. However, despite the deep cuts, traders note that Saudi crude remains priced above spot offers from regional rivals, including the UAE, Qatar, and Iraq. Xu said Aramco's price cuts reinforce market concerns about oversupply and the potential for a price war, as Middle Eastern supply is recovering faster than demand. The supply surge is broad-based. Kpler data shows that non-Iranian crude shipments from the Persian Gulf climbed to 8.55 million barrels per day in July, up from 2.1 million b/d in May, as terminal operations normalize and producers use infrastructure to bypass Hormuz. Total non-Iranian exports from the region reached 14.3.