$33/bbl freight from the Gulf to China has forced producers to rethink how they sell crude, because shipping rates impact on oil trade now pushes delivered prices above what refiners will pay. Saudi Aramco’s November OSP for Arab Light was set at a $5/bbl discount to Oman/Dubai, a move meant to soften the freight bill for Asian buyers.
Gulf-to-China freight hits $33/bbl
$4/bbl in March became $17/bbl after the war began, then eased to $11–12/bbl through April-July before another jump after the expiry of the US-Iran ceasefire in August. By late September, VLCC rates from the Gulf to China had reached $33/bbl, while current landed costs from the Middle Eastern Gulf to China are around $140/bbl and Japan and South Korean freight has lifted landed costs to around $145/bbl.
$5/bbl is not enough to erase a $10–15/bbl shipping bill outside Hormuz, but it does narrow the gap for cargoes fixed now for loading roughly two months later. Natalia Katona, a freelance commodity analyst based in the United Arab Emirates, said freight is reshaping global oil trade and the prices producers can command for their crude.
Saudi Aramco, Arab Light and Yanbu
$6–7/bbl was the earlier Yanbu-to-China freight band after the initial wartime spike, but Houthi restrictions on Saudi cargoes through Bab el-Mandeb drove that route to $28/bbl by mid-October. Landed costs from Yanbu to China were around $140/bbl at that point, and Saudi loadings at Yanbu slowed to 1.6-1.8 million b/d after intensified attacks on energy infrastructure along the Red Sea coast.
$5/bbl discounts help only partially because very few Asian refiners want to charter their own vessels and send them to the Gulf to load. That leaves Saudi barrels, including cargoes from Sohar sold on a spot basis rather than through OSP, exposed to onward freight that still pushes landed Saudi crude in China above $130/bbl.
China buyers wait on freight
$130/bbl remains the reference point for Chinese buyers weighing whether to lift cargoes now or wait for rates to ease. Saudi Aramco is fixing a differential today for barrels that load about two months later, while persistently high freight could limit or even erase the seller’s margin; some tanker use through Bahri can offset that pressure by keeping shipping earnings within an affiliated business.
