Saudis raise Asia oil to record premium as war upends market

Published Mon, Apr 6, 2026 · 09:57 PM

[RIYADH] Saudi Arabia raised the price of its main oil grade to Asia to a record-high premium, as a widening conflict in the Middle East and Iran’s near closure of the Strait of Hormuz convulse energy markets.

State oil producer Saudi Aramco increased flagship Arab Light crude for sales in May to a premium of US$19.50 over regional benchmarks for refiners in Asia, a price list seen by Bloomberg showed.

Still, it was about half the level anticipated in a survey compiled by Bloomberg, with April particularly hard to gauge given volatile Middle East indices since the war, and a plunge in prices towards the end of April, traders said.

The Dubai and Oman oil benchmarks – used by Saudi Arabia to price its oil – had become increasingly erratic in March, as the war created a shortage of the barrels used to assess prices for the region.

Refiners in Asia had floated other suggestions for indexing the kingdom’s oil, including switching to the global benchmark Brent.

Shift in oil flows

The war that has entered its sixth week has also forced a shift in oil flows as the vital Strait of Hormuz remains largely shut, blocking the usual route for millions of barrels of crude from Saudi Arabia and other major Persian Gulf producers.

Riyadh has since shifted most of its shipments to the Red Sea port of Yanbu, which is about 1,200 km from its usual loading port of Ras Tanura on the other side of the country.

But Saudi Aramco’s official list stuck with the usual practice of pricing oil for loading at Ras Tanura, adding another layer of complexity on what buyers would pay for lifting crude.

The company asked its customers to submit separate requests for the amount of oil they would like to receive from either port, and said it would only supply the Arab Light grade from Yanbu.

The war and the near closure of Hormuz have driven Brent crude up by more than 50 per cent.

Aramco raised prices of the Arab Light grade by US$17 a barrel for May, the biggest jump on record.

It also increased pricing on all of its other crude grades to Asia by the same amount, even if those will not be offered with Hormuz closed. Supplies to other regions, such the US and north-west Europe, were also raised to a record premium.

Saudi Arabia and the United Arab Emirates are the only two Gulf producers with significant export alternatives that circumvent Hormuz.

Aramco has reached the maximum capacity of seven million barrels a day on its pipeline running to the Red Sea coast, exporting close to five million barrels a day of crude from there, or about 70 per cent of its prewar total shipments.

The company has shut most production of its Medium and Heavy crude grades and is instead focusing on selling its Light and Extra Light barrels from Yanbu, chief executive officer Amin Nasser said on a conference call on Mar 10. BLOOMBERG