Saudi Aramco sets Arab Light price to Asia at six-year low for September, cutting OSP to minus $2 a barrel
Image generated with artificial intelligenceSaudi Aramco set its official selling price for Arab Light crude to Asia at $2 a barrel below the Oman/Dubai average for September—the lowest level since June 2020. That’s a further cut from minus $1.50 a barrel in August, when the state oil company had already slashed the price by the largest margin in more than two decades.
Aramco sets September Arab Light OSP at lowest since 2020
The 50-cent cut from August’s minus $1.50 a barrel brings Arab Light to its weakest pricing point in six years. August’s OSP had already rattled the market—Aramco dropped it by the largest margin in over two decades. September’s move is smaller, but it pushes the price deeper into negative territory. Aramco, it seems, sees no reason to ease up on its competitive stance in Asian markets anytime soon.
The June 2020 comparison is worth sitting with. That was a period of historic demand collapse—COVID-19 had gutted global oil consumption and prices cratered across the board. Matching those levels now, under very different conditions, says a lot about how much pressure Aramco is absorbing—or choosing to absorb—to defend its market share in Asia.
Dubai cash premiums averaged $1.26 a barrel in July, according to Reuters data—a sharp drop from $2.39 a barrel in June, more than a dollar gone in a single month.
Declining spot benchmarks drove the September price reduction
OSP adjustments don’t happen in a vacuum. They follow the spot market, and July’s spot data made a September cut almost inevitable.
Dubai cash premiums averaged $1.26 a barrel in July, according to Reuters data—a sharp drop from $2.39 a barrel in June, more than a dollar gone in a single month. Spot Oman premiums also fell, averaging 91 cents a barrel in July, down from higher June levels. When the benchmarks underpinning term crude pricing weaken like that, OSPs tend to follow.
Aramco prices its term crude as a differential to the Oman/Dubai average, so when that average softens, the differential adjusts to keep term barrels competitive against spot alternatives. The September cut is, in large part, a mechanical response to what happened in the spot market last month.
Full OSP table shows mixed changes across crude grades
Not every grade moved in the same direction for September—and that distinction matters.
Light and Extra Light grades were both cut by 50 cents a barrel. Super Light followed, dropping 50 cents to minus $0.35 a barrel. These lighter grades are facing softer demand conditions in Asia, and the cuts reflect that directly. Medium and Heavy grades, though, moved the other way—both rose by $1.25 a barrel for September, partially reversing prior cuts. Medium crude goes from minus $3.25 to minus $2.00 a barrel; Heavy moves from minus $4.60 to minus $3.35 a barrel.
That split points to different demand dynamics playing out across the Asian refining complex. Heavier, more sour crude grades appear to be finding stronger relative demand—or at least less oversupply—compared to lighter ones. A single headline number doesn’t fully capture that picture.
Here’s the full September OSP table compared to August:
| Grade | September | August | Change |
|---|---|---|---|
| Super Light | -0.35 | +0.15 | -0.50 |
| Extra Light | -1.50 | -1.00 | -0.50 |
| Light | -2.00 | -1.50 | -0.50 |
| Medium | -2.00 | -3.25 | +1.25 |
| Heavy | -3.35 | -4.60 | +1.25 |
Iran-Oman talks and the Strait of Hormuz add uncertainty to oil markets
Beyond the pricing mechanics, there’s a geopolitical layer keeping oil traders on edge.
Iran and Oman are engaged in diplomatic talks, and market participants are watching closely for any sign of progress toward a peace deal. A deal could potentially lead to the reopening of the Strait of Hormuz—the narrow waterway between Iran and Oman through which roughly 20% of global oil and liquefied natural gas supplies flow. Any disruption, or resolution, involving that chokepoint carries enormous implications for energy markets worldwide.
Brent crude futures have already moved in response to diplomatic signals, returning to levels last seen on June 17, when the U.S. and Iran reached an interim agreement. That suggests the market is pricing in at least some probability of a diplomatic outcome, though uncertainty remains high.
A reflection of diverging demand conditions
Saudi Aramco cut its Arab Light OSP to Asia by 50 cents a barrel for September, setting it at minus $2 versus the Oman/Dubai average—the lowest since June 2020. The cut follows a sharp drop in Dubai and Oman spot benchmarks in July, which feeds directly into how term crude differentials get set.
Super Light, Extra Light, and Light grades all fell by 50 cents a barrel. Medium and Heavy bucked that trend, rising by $1.25 a barrel each—a reflection of diverging demand conditions across the Asian refining market.
Iran-Oman diplomatic talks are adding a separate layer of uncertainty. With about a fifth of global oil and LNG supplies transiting the Strait of Hormuz, any development in those negotiations has the potential to move markets meaningfully, in either direction.
Kelly is an experienced writer with 15 years of experience exploring the big stories that shape our world, from tech breakthroughs and space exploration to climate, energy, and the fascinating quirks of science. She has a talent for turning complex ideas into sharp, memorable insights that stay with readers long after they’ve finished reading.
