Flood of supply returns! Saudi crude oil price cut for Asia hits $11 per barrel—the largest in 26 years.

A global surge in supply has intensified market competition, prompting Saudi Arabia to deliver its largest crude oil price cut for Asian buyers in over two decades—pressuring Brent crude to hover near $72 per barrel. According to a pricing schedule obtained by Bloomberg, Saudi state-owned producer Aramco slashed the official selling price (OSP) for its Arab Light crude to Asian customers by $11 per barrel for August deliveries—setting it at a $1.50-per-barrel discount to regional benchmarks. This marks the steepest cut since 2000 and far exceeds the $8-per-barrel reduction anticipated in Bloomberg’s prior survey. The direct catalyst for this round of oil price declines was the U.S.-Iran ceasefire agreement and the resumption of navigation through the Strait of Hormuz. Since the U.S.-Iran ceasefire announcement in mid-June, Brent crude has tumbled sharply to around $72 per barrel—returning to levels seen before the U.S. and Israel launched military action against Iran earlier this year. Meanwhile, a fresh wave of Middle Eastern supply has continued weighing on regional crude prices, and Asian refiners are increasingly confronted with an oversupplied market. Strait of Hormuz reopens; Saudi supply surges back Aramco has restored its crude exports via the Strait of Hormuz to approximately 90% of pre-war levels. During the conflict, the Strait of Hormuz remained largely closed for much of the time, prompting Saudi Arabia to shift the bulk of its export flows from Ras Tanura port in the Persian Gulf to the Yanbu facility along the Red Sea coast.

Saudi Arabia reportedly plans to restore half the capacity of its critical East-West Pipeline within days; secret U.S.–Houthi contacts surface.

According to Reuters, citing informed sources, Houthi representatives told U.S. officials during the meeting that they do not intend to attack U.S. or Israeli vessels and affirmed their commitment to the 2025 bilateral ceasefire agreement. One Yemeni source added that the Houthis also pledged not to target any commercial vessels—except those belonging to Saudi Arabia. None of these reports have yet been officially confirmed by any party. Recent reporting indicates that, under pressure from pipeline disruptions and forced rerouting of export routes, Saudi Arabia is striving to restore roughly half the capacity of its East-West Pipeline within days while simultaneously ramping up spot sales near the Strait of Hormuz. At the same time, previously undisclosed informal contacts between the United States and the Houthi movement have come to light—adding further uncertainty to an already highly volatile maritime region. This contact signal has complicated market assessments of the Red Sea situation. London-traded Brent crude has surged past $107 per barrel; the earlier shutdown of the East-West Pipeline had already placed millions of barrels per day of export volumes at risk. Aramco’s increased spot sales near the Strait of Hormuz—and the informal U.S.–Houthi engagement—both point toward a situation fraught with high uncertainty: Saudi Arabia is bearing pressure alone, while Washington’s stance remains ambiguous. Bypass plan advances; full restoration targeted within six weeks Citing an anonymous source familiar with the matter due to its sensitivity, Bloomberg reports that Saudi Aramco is working to bypass damaged sections of the East-West Pipeline, aiming to restore about half its capacity within days—and targeting full operational recovery within approximately six weeks. Neither Aramco nor the Saudi Ministry of Energy has commented publicly on the matter. The East-West Pipeline traverses Saudi Arabia from east to west, linking eastern oilfields with the Red Sea port of Yanbu. During the Iranian conflict’s disruption of the Strait of Hormuz, it served as a critical alternative route enabling Saudi Arabia to circumvent Strait-related risks and safeguard exports. Following last week’s drone strike—which halted pipeline operations—the question of how much volume can be moved, and when operations will resume, has become a core variable closely tracked by oil traders. For now, the above timeline reflects Aramco’s internal target—not an official commitment. Aramco pivots to the Strait of Hormuz, launching large-scale spot sales to Asian buyers In response to the East-West Pipeline shutdown, Aramco has swiftly adjusted its export strategy. According to multiple traders familiar with the transactions—as cited by Bloomberg—Aramco sold approximately 20 million barrels of crude to Asian refiners this week, with loading and delivery scheduled for September–October outside the Strait of Hormuz. Buyers include Chinese refineries and other East Asian importers. These cargoes are being loaded via ship-to-ship transfers in the Gulf of Oman—meaning the buyer’s pickup point lies outside the Strait of Hormuz, and the shipping risk associated with transiting the Strait falls on the seller, not the buyer. Concurrently, Aramco has delayed some shipments originally scheduled for delivery from the Red Sea port of Yanbu to European customers and at least one East Asian refinery; the scale of these delays remains unclear. Bloomberg previously reported separately on this development. This shift in export routing signals Saudi Arabia’s forced return to its traditional Persian Gulf–Strait of Hormuz export corridor following the pipeline outage—even though maritime security risks along that route persist. U.S.–Houthi weekend talks in Oman; all parties adopt cautious public statements

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