Saudi Aramco Sets Record $19.50 Premium on Arab Light Crude for Asia in May

Saudi Aramco has set the official selling price for its flagship Arab Light crude destined for Asia in May at a premium of $19.50 per barrel over the Oman-Dubai benchmark average, according to a price list seen by Bloomberg.

The increase takes the grade from the $2.50 premium applied for April loadings to the highest differential Aramco has ever posted for Asian customers.

Data compiled by Bloomberg since 2000 show the previous record stood at $9.80 per barrel in August 2022.

Traders and refiners had braced for an even steeper jump. Surveys conducted in late March pointed to a possible premium as high as $40 per barrel, driven by the sharp tightening in Middle East crude supply after the US-Israeli conflict with Iran escalated and nearly closed the Strait of Hormuz to tanker traffic.

The actual $19.50 figure, while still a record, landed below those extreme expectations.

Aramco continues to route limited volumes to Asian term customers via the Red Sea port of Yanbu rather than the Persian Gulf terminals normally used for Arab Light exports.

The company told buyers in March that it would restrict April liftings to Arab Light cargoes from Yanbu only, a policy that has kept supplies tight and forced some refiners to seek replacement barrels on the spot market at elevated prices.

Asian buyers, which account for the bulk of Saudi crude exports, will face markedly higher feedstock costs next month.

The premium applies to loadings scheduled for May and reflects the producer’s assessment of current market conditions rather than any formal comment from Aramco executives.

The pricing move arrives as global oil flows remain disrupted by the regional conflict.

Traditional export routes through the Strait of Hormuz have been curtailed, prompting Aramco to rely on longer, costlier alternative paths and limiting the volumes available to its largest customers.

This record differential underscores the persistent supply constraints that have pushed Middle Eastern crude to some of the highest relative prices in the world.

Asian refiners now must absorb the elevated cost or pass it along in product markets, with the full effects likely to appear in regional gasoline and diesel prices over the coming weeks.