Saudi Expected to Slash Asia Oil Prices as Hormuz Reopens

Key Facts

1Saudi Aramco is expected to slash the official selling price of Arab Light crude by between $6.50 and $8.00 per barrel for August loading.

2The expected reduction follows the tentative reopening of the Strait of Hormuz and increased oil supply from the region.

With oil flows resuming through the Strait of Hormuz after its reopening, crude prices face fresh downward pressure. According to reports, Saudi Aramco is expected to slash its official selling price for Arab Light crude by between $6.50 and $8.00 per barrel for August loading, aiming to maintain competitiveness in Asia. The expected cut follows the resumption of navigation in the strait and increased regional supply.

The outlook comes as API data showed US crude stocks fell by only 0.765 million barrels in the week to June 23, compared to an 8.33 million barrel decline the prior week, signaling a slowdown in inventory draws. Meanwhile, China kept its benchmark loan prime rates unchanged, reflecting steady demand from the world's top oil importer. The potential return of Iranian supplies after the Hormuz reopening is also adding to price pressure.

Traders are awaiting the official Aramco price announcement in the coming days, which could set the tone for August pricing. As of the June 26 close, Brent crude was trading around $75.50 per barrel per market data, with further downside risk if the steep cut materializes. Markets will also focus on US jobs data and inflation reports in the next two weeks to gauge global demand trends.