Saudi Arabia has cut the price of its flagship crude grade Arab Light loading for Asia in February, in the third consecutive monthly reduction amid ample supply and weakened Middle Eastern benchmarks.
Saudi Arabia, the world’s largest crude oil exporter, lowered the official selling price (OSPs) of Arab Light by $0.30 per barrel above the average of the Oman and Dubai benchmarks, to a premium of $0.30 a barrel above the Oman/Dubai quotes. That’s down from a premium of $0.60 per barrel for the January loadings and the lowest premium in more than five years.
The cut was generally in line with expectations of refiners in Asia, who had anticipated a decline of between $0.10 and $0.30 per barrel for February loadings of Arab Light to Asia.
Saudi oil giant Aramco has also slashed the price of all other grades to Asia by $0.20-$0.30 per barrel. It also cut all OSPs for loadings to the United States by $0.30-$0.40 a barrel, and all crude grades bound for Northwest Europe and the Mediterranean by $.0.40 per barrel, according to the pricing list seen by Reuters.
Saudi Arabia typically announces around the fifth of each month its crude pricing for the following month and doesn’t comment on price changes. It also sets the tone for the pricing of the other major oil producers in the Middle East, influencing the pricing policy of about 9 million barrels per day (bpd) of exports from the Arab Gulf region.
The Saudi decision to cut the prices of all its oil for all regions signals persistent concerns that the global market is tilted into oversupply in the first quarter of the year, with demand typically at its weakest at the start of each year.
The Kingdom’s decision to cut the prices of all its crude grades follows this weekend’s short OPEC+ meeting, at which the eight producers implementing the cuts reaffirmed they would keep oil production steady through the first quarter of 2026.
Delegates did not discuss the Venezuela blitz of the Trump Administration during the 10-minute online meeting, and they are reportedly not concerned that the capture of Nicolas Maduro would have an effect on global oil supply in the near term.
By Tsvetana Paraskova for Oilprice.com
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