By Yongchang Chin, Serene Cheong, Rong Wei Neo and Anthony Di Paola

(Bloomberg) -- Saudi Arabia cut its main crude oil price for Asia amid talks on a deal to ease shipping through the Strait of Hormuz, even as threats by Iran-backed Houthi militants imperil an alternative route for eastbound flows through the Red Sea.

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State producer Saudi Aramco will cut its Arab Light oil price for delivery to customers in Asia next month by 50 cents a barrel to $2 a barrel less than the regional benchmark, according to a price list seen by Bloomberg. Traders in a Bloomberg survey had expected the Saudi producer to leave its flagship price level unchanged.

Global benchmark Brent crude has slumped this week and is trading near $80 a barrel amid renewed talks to ease flows through Hormuz. Iran said it had reached an agreement with Oman on a proposed route for shipping through the critical waterway, a potential step toward a reopening it for energy supplies.

As the US war with Iran upended crude markets and blocked Hormuz, the gateway to the Persian Gulf, Aramco rushed to divert the bulk of its export volumes to the Red Sea port of Yanbu in the country's west. The country's East-West pipeline became a lifeline to reach markets, yet the shipments via the Red Sea are under pressure as the Houthis threaten more attacks on tankers.

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So far Aramco has sustained crude exports at about 5 million barrels a day, Chief Executive Officer Amin Nasser said on an earnings conference call on Tuesday. That's about 70% of the company's normal level of shipments.

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