Iran slashes August crude price for Asia amid war, Saudi rivalry

Iran's National Iranian Oil Company has cut its August official selling price for Iranian Light crude to Asian buyers by $11.50 a barrel from the previous month, according to RIM Intelligence, setting the grade at a discount to the regional Oman/Dubai benchmark for the first time in years. The move follows July's premium of $7.15 above the Oman/Dubai average and mirrors a broader collapse in Middle Eastern crude pricing amid fierce competition for Asian buyers.Investing.com+1

War Threatens Refinery Recovery

The price slash comes as the escalating U.S.-Iran war threatens Asian oil refiners' plans to ramp up output in August, Reuters reported on Tuesday. U.S. forces have struck Iranian military targets for 11 consecutive nights as of Wednesday, while oil tankers were making U-turns in the Red Sea after warnings from Iran-backed Houthi militants. Brent crude has climbed back above $90 a barrel, erasing the brief calm that followed a June ceasefire.WTAQ News Talk | 97.5 FM · 1360 AM | Green Bay, WI+1

The fragile memorandum of understanding signed between Washington and Tehran on June 17 to end the war effectively collapsed in early July, after Iran targeted commercial vessels in the Strait of Hormuz. The U.S. revoked its sanctions waiver on Iranian oil sales — originally set to run through August 21 — effective July 17, and launched fresh strikes on Iranian energy and military infrastructure.Reuters+3

Price War Amid Sanctions Chaos

NIOC's dramatic cut follows Saudi Aramco's record $11-per-barrel reduction to its August Arab Light OSP earlier this month, which set that grade at $1.50 below the Oman/Dubai average — the deepest discount since June 2020. Both producers are competing for buyers in a market where Asian refiners had already secured crude commitments through August before the latest escalation.Reuters+2

China's independent refiners have been turning away from Iranian barrels toward cheaper Iraqi and UAE alternatives. Chinese imports of Iranian crude fell 41% in June from May to a 17-month low, according to S&P Global data. Analysts warn that if supply disruptions persist, global fuel stocks could remain tight even as refinery margins incentivize higher runs.S&P Global Energy+1

Outlook Remains Volatile

The International Energy Agency warned earlier this month that renewed hostilities threaten the oil supply recovery, with world oil demand on track to fall for the first time since 2020 as the conflict continues to disrupt Middle Eastern production and exports. Refiners across Asia, which cut throughput sharply during the initial months of the war that began February 28, now face uncertainty over whether the Strait of Hormuz will remain open to commercial traffic.Al Jazeera English+2