Brent Holds Above $91 as Aramco Asia Price Cut Tests Depth of Ceasefire Rally
ICE Brent crude front-month has clawed back most of its July 27 ceasefire drop, but Aramco's largest Asia price cut since 2022 signals the market is repricing supply risk.
ICE Brent crude front-month stood at $91.04 a barrel as of Sunday August 2's close, having recovered most of the ground it lost when Washington and Tehran announced a pause in their exchange of strikes on July 27.5
On July 27, the contract briefly slipped below $90 a barrel, falling as much as 7% in early Asian trading on the ceasefire news. NYMEX WTI crude front-month dropped toward $80 the same session, down around 4%. The moves reversed part of what had been one of crude's sharpest monthly rallies in years: ICE Brent had surged more than 20% through July as conflict spread beyond the Strait of Hormuz into the Red Sea, threatening two major export corridors simultaneously.5
Saudi Arabia moved quickly once the interim deal was in place. Aramco cut official selling prices for its main crude grades to Asia, the largest reduction since 2022, according to Crypto Briefing, as nearly 10 million barrels of oil entered the market and supply concerns softened. Options pricing shifted accordingly: the odds of crude hitting a new all-time high by September 30 fell to 2.6% from 10% the prior week, while December 31 contracts put those odds at 7.5%, down from 16%.3
The scale of the price cut is significant because Asia is Aramco's largest export market, and changes to official selling prices signal where the kingdom expects demand to settle once the disruption premium fades. A cut of that magnitude going into August suggests Riyadh sees sufficient supply returning to warrant competing harder on price, rather than holding margin.3
Yet OPEC+ had already been loosening supply discipline before any ceasefire. The seven non-sanctioned members ratified a 188,000-barrel-per-day production increase for July, the fourth consecutive monthly hike, even as Hormuz closure was simultaneously removing an estimated 10 million barrels per day of Gulf output, according to Oilprice.com. Adding supply into a disrupted system at that pace sharpens the quota arguments that will emerge once flows normalise and the buffer absorbs the returning barrels.1
Aramco is also restructuring how its asset base generates cash. Reuters reported the company is exploring a sale of a stake in its sulfur operations, eyeing up to $7 billion in proceeds, with one source telling Reuters the broader infrastructure base could be worth as much as $50 billion. Those discussions follow a reported $10 billion real estate process earlier this year and an $11 billion Jafurah midstream deal with a BlackRock-led consortium closed in 2025.2
Against the Middle East backdrop, Halliburton secured a spate of regional contracts in July, including work tied to Iraq's Bin Umar field, where the Basra Oil Company has projected first-phase output of roughly 150,000 barrels per day of oil and 300 million standard cubic feet per day of associated gas.6
Halliburton's North American numbers were more qualified. The company posted adjusted operating income of $683 million for the second quarter, down 6.1% from a year earlier and below the average analyst forecast of $688.7 million tracked by Rigzone. Management said it was "encouraged" by the regional recovery. JPMorgan Chase analyst Arun Jayaram described tightening fracking equipment availability as a pricing tailwind across the sector, with improving service pricing the "unifying message" across the industry.4
Chevron's capital commitment to Vaca Muerta points in the same direction. The company applied to join Argentina's RIGI tax incentive framework for its $13.8 billion unconventional El Trapial project in the shale play, according to Oilprice.com, which would rank among the largest single investments under the scheme. Operators committing that volume of capital to unconventional shale carry a long-dated price view that extends well past the current volatility.1
The supertanker market has already adjusted for disruption it expects to outlast any truce. The global orderbook for Very Large Crude Carriers soared to an all-time high as shippers rushed to secure capacity for 2029-2030 delivery, according to Oilprice.com, betting on rerouting patterns that prove durable even if the current pause holds.1
How much of July's rally ICE Brent retains into the fourth quarter depends on the pace at which Iranian crude volumes return and whether physical shortfalls from weeks of rerouting prove stickier than the ceasefire headlines suggest. The speed of Aramco's Asia price cut implies the kingdom does not intend to wait long to find out.3