Saudi Arabia cut the price of its flagship crude for Asian buyers again as hopes of a deal to move more tankers through the Strait of Hormuz pushed oil prices lower.

Saudi Aramco will reduce the September official selling price for Arab Light by 50 cents per barrel, putting it at a $2 discount to the regional benchmark.

The cut lands as Iran says an agreement with Oman on a shipping route through Hormuz is in its final stages. Brent crude has dropped to around $80 per barrel, down roughly 20% in two weeks, as traders bet that more Persian Gulf barrels may soon reach the market.

Despite the optimism, Saudi exports through Hormuz remain constrained, and previous attempts to boost traffic have run into renewed fighting and attacks on vessels.

Aramco has kept exports near 5 million barrels per day, according to chief executive Amin Nasser, about 70% of normal volumes. The Kingdom has relied heavily on Yanbu on the Red Sea to keep crude moving while its main Gulf terminal at Ras Tanura operates below normal export levels.

But Houthi threats around Bab el-Mandeb have made the Red Sea route unattractive, forcing Aramco to consider sending cargoes through Egypt’s SUMED pipeline and loading them at Sidi Kerir on the Mediterranean.

The rerouting isn’t without difficulties. Asian refiners had already pushed Saudi Arabia for discounts to offset the longer voyage around Africa and higher shipping costs.

Aramco raised prices for some Medium and Heavy grades headed to Asia, although those barrels usually leave from the Persian Gulf, making the pricing somewhat theoretical until shipping improves. It cut prices for all grades headed to the United States, Northwest Europe and the Mediterranean.

Source: Oilprice