Saudi Arabia has raised the official selling price of its flagship crude to Asia by the largest margin in three and a half years, moving swiftly to capitalize on a supply shock triggered by Iran’s de facto blockade of the Strait of Hormuz.
Saudi Aramco, the kingdom’s state-owned oil giant, increased the April official selling price of its benchmark Arab Light crude for Asian buyers by $2.50 a barrel, according to reports from Bloomberg and MarketWatch on March 5 local time. The move marks the steepest month‑to‑month hike since August 2022 and comes as regional tensions involving the United States, Israel and Iran spill directly into global energy markets.
Aramco also raised the prices of its other crude grades to Asia by $2 a barrel and imposed increases for customers in the United States, northern and western Europe, and the Mediterranean, underscoring Riyadh’s confidence that buyers will accept higher costs amid tightening supplies.
The decision follows a dramatic run‑up in international benchmarks as tankers have all but disappeared from one of the world’s most critical energy chokepoints. West Texas Intermediate (WTI) futures jumped 8.51% in the latest session to trade above $81 a barrel, the highest level in about 20 months, dating back to July 2024. Brent crude for May delivery settled at $85.41 a barrel on the ICE Futures exchange, up 4.93% on the day.
For the week, Brent’s 18% surge was the largest since 2022, according to Bloomberg, a scale of movement that recalls previous geopolitical supply shocks rather than routine market volatility.
Behind the price action is the near‑total paralysis of traffic through the Strait of Hormuz, the narrow waterway at the mouth of the Persian Gulf through which a significant share of the world’s seaborne oil and gas typically flows. Since the outbreak of hostilities on February 28, Iran’s effective blockade has rapidly choked off tanker movements.
Data cited by the United Kingdom Maritime Trade Operations (UKMTO), drawing on figures from the U.S. Navy‑led Joint Maritime Information Center (JMIC), illustrate the speed of the collapse. On February 28, the day the war began, 50 tankers transited the strait. By March 1, that number had plunged to three, held at three on March 2, and fell to zero on March 3. Over the most recent 24‑hour period, only two merchant vessels passed through Hormuz, and both were general cargo ships rather than oil tankers.
Ship‑tracking data compiled by Bloomberg show overall traffic through the strait down more than 95% compared with the days immediately preceding the conflict, with major oil and gas carriers now avoiding the route altogether.
With its primary export artery effectively severed, Saudi Arabia is reported to be weighing a large‑scale diversion of crude shipments to the Red Sea port of Yanbu, which is connected to eastern oil fields by pipeline. While that alternative corridor offers a partial workaround to the Hormuz bottleneck, it entails additional logistical complexity and higher costs — factors that analysts say are now being priced into Aramco’s official selling terms.
The combination of heightened geopolitical risk, disrupted supply chains and rerouting expenses has tightened the physical market just as refiners in Asia, the world’s largest demand center for crude, prepare for seasonal consumption. Against that backdrop, Riyadh’s aggressive price move signals both a bid to protect revenue and a judgment that buyers, facing few immediate alternatives, will have little choice but to pay up.
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