191117 saudi aramco
Saudi Aramco has cut its prices for Asia, keeping in mind possible slump in demand from China. Image Credit: Reuters

Singapore (Bloomberg): Saudi Arabia’s state oil company has made deep cuts to the price of crude it sells to Asia.

Saudi Aramco lowered most of its official selling price “differentials” for the crude varieties it sells in the world’s largest consuming region, effectively making them cheaper.

Like every other producer, Saudi Arabia is assessing the impact of a virus that’s helped to wipe out about 20 per cent of oil consumption in China, the nation that for years has been the engine of global economic growth. The Mcountry’s official selling prices were boosted sharply at the start of this year for certain grades as new rules kicked in that forced the world’s ships to burn lower-sulfur fuels.

Aramco cut its official selling price differential for flagship Arab Light crude by 80 cents a barrel to a premium of $2.90 over the Middle East Oman-Dubai benchmark for March sales to Asia. The reduction exceeded the estimates of six traders surveyed by Bloomberg, who had expected a 58-cent cut.

The one exception to the price cuts is for “Arab Heavy”, which was kept unchanged, at 55 cents a barrel premium.