The harshest blow yet to Putin: Saudi Arabia announces discounts for India and China to replace Russian oil

Summary: Saudi Arabia, aiming to replace Russian oil exports, has announced an OPEC+ production increase and introduced steep price cuts for Asian customers—especially India and China. Starting in December, Saudi Arabia will cut prices by $1.2–$1.4 per barrel for all grades of crude sold to Asian buyers, while offering only a $0.50 discount to the Americas and no discount to Europe. This move coincides with the recent U.S. sanctions against major Russian oil companies entering into force; several Indian and Chinese refineries have already suspended imports of Russian oil and shifted procurement to Saudi Arabia or other markets. Saudi Arabia seeks to capture Russia’s share of seaborne oil exports to Asia—and thereby weaken Putin’s energy revenues. Since Russia’s invasion of Ukraine over three years ago, Western countries have imposed energy-centered economic sanctions on Russia to undermine its military financing. Yet India has repeatedly explained externally that its expanded imports of Russian oil stem purely from commercial considerations—namely, the substantial discounts offered by Russia, which make it price-competitive. On October 29, the United States announced a new round of sanctions targeting Russia’s two largest oil giants—Lukoil and Rosneft—as well as 34 of their subsidiaries. Following this, some Indian and Chinese oil companies announced suspensions or reductions in Russian oil imports. Nevertheless, certain voices in both countries continue to argue that purchasing low-cost Russian oil remains a legitimate commercial activity—not one that should be halted! Well then—the harshest blow yet to Russian oil exports has landed squarely on Putin. According to a press release from Saudi Aramco, Saudi Arabia’s state-owned oil company, cited by the professional oil website OILPRICE, the world’s largest oil exporter is simultaneously leading OPEC+ producers to raise output—adding to an already ample market supply—and lowering prices for all grades of crude sold to Asian customers, especially those in China and India. I. OPEC+ countries announced an additional daily production increase of 104,000 barrels in November, and starting in December through March next year, will further raise daily output by 137,000 barrels. Eight voluntary OPEC+ participants—Saudi Arabia, Iraq, the UAE, Kuwait, Kazakhstan, and others—held a virtual meeting on November 2, 2025, to review global market conditions and outlooks. Citing stable global economic prospects, healthy market fundamentals, and low petroleum inventories, these eight participating countries decided to raise daily output by 137,000 barrels beginning December 2025, bringing total output to 33.292 million barrels per day. This increased daily output level will be maintained through January–March next year. In November, the OPEC+ group—which includes both OPEC members and select non-OPEC producers—reported that crude oil output rose by 0.5% (or 104,000 barrels per day) compared to October. This growth was driven primarily by higher output from Saudi Arabia, Libya, and Iran, offsetting declines in Iraq, Venezuela, and Kuwait. II. Saudi Arabia announced a $1.2-per-barrel price cut for its Arab Light crude delivered to Asian customers starting in December. Alongside the production increase announcement, Saudi Arabia also lowered delivery prices for Asian customers—particularly those in China and India. Specifically, the sales price for Saudi Arab Light crude scheduled for December delivery will be reduced by $1.20 per barrel, meaning it will now sell at a $1.00 premium to the Oman/Dubai benchmark—down from the previous $2.20 premium per barrel.

First 'discount pricing' since 2020! Saudi Arabia 'slashes oil prices' by $11 in one go

Saudi Arabia has announced the largest official crude export price cut in over 26 years—a move signaling profound shifts in the global oil market’s supply landscape. According to Reuters, Saudi Aramco, the national oil company of Saudi Arabia, issued a pricing statement on Monday setting the official selling price (OSP) for its flagship Arab Light crude destined for Asia in August at $1.50 per barrel below the Oman/Dubai average—marking a dramatic $11-per-barrel reduction from the previous month. Reuters’ data dating back to 2003 shows this to be the largest recorded cut, and the August OSP also marks the lowest level since June 2020. It is the first time since the 2020 price war that Saudi Arabia has sold crude at a discount. This price cut far exceeded market expectations. A late-June Reuters survey had forecast the August OSP premium would range between $1.50 and $3.00 per barrel; instead, the final figure turned negative—shifting from premium to discount—and thus significantly surpassed expectations. Meanwhile, OPEC+ announced on Sunday that it would further raise production targets starting in August. Against the backdrop of gradually resuming oil exports through the Strait of Hormuz, mounting global supply pressure continues to weigh heavily on oil prices. A record-breaking cut in over two decades—with Asian buyers as the core target The primary focus of this price cut is the Asian market—especially China and India, the world’s two largest crude importers. Saudi Aramco slashed the August OSP for Asia from a $9.50-per-barrel premium last month to a $1.50-per-barrel discount—a single-month swing of $11—representing the largest adjustment since 2003. Oil market analyst Ahmed Mehdi stated that this official price cut “reflects a backlog of near-term cargo supplies,” adding that it signals not a price war but rather “the normalization of chaos in the Strait of Hormuz.” He added: “Pricing must be competitive enough to rekindle buyers’ purchasing interest.”

Saudi Arabia unexpectedly cuts oil prices to Asia

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