Saudi Arabia Poised to Cut February Oil Prices to Asia for Third Straight Month Amid Supply Glut
State exporter expected to extend price reductions for key crude grades as global markets remain well supplied and benchmarks weaken
Saudi Arabia is set to lower the official selling prices of its crude oil bound for Asian buyers in February, marking a third consecutive monthly reduction in a trend driven by ample global supply and weakening spot market signals.
According to a survey of Asian refining sources, the price of Saudi’s flagship Arab Light grade is expected to be trimmed by between ten and thirty cents per barrel, bringing its premium over the Oman/Dubai benchmark average down to around thirty to fifty cents per barrel, the lowest level in more than five years.
The anticipated cuts extend declines from January, when the premium fell to roughly sixty cents per barrel.
Other grades such as Arab Extra Light are also likely to see modest downward adjustments, while Arab Medium and Arab Heavy are forecast to remain flat or decline by around ten cents.
The expected pricing move reflects sustained oversupply pressures, with production increases from the Organisation of the Petroleum Exporting Countries and its allies, combined with robust output growth in the United States and other non-OPEC producers.
Global supply dynamics are further highlighted by projections from international energy agencies that supply could outpace demand by several million barrels per day next year, underscoring downward pressure on benchmark and official selling prices.
Saudi Aramco generally announces its monthly official selling prices around the fifth of each month, and its decisions often influence pricing strategies across the Middle East, affecting crude shipments totalling millions of barrels per day to Asian markets.
The potential price cuts come as refiners in Asia navigate a landscape of falling spot premiums and well-stocked inventories, prompting expectations that lower official prices may support continued demand in a competitive market.
According to a survey of Asian refining sources, the price of Saudi’s flagship Arab Light grade is expected to be trimmed by between ten and thirty cents per barrel, bringing its premium over the Oman/Dubai benchmark average down to around thirty to fifty cents per barrel, the lowest level in more than five years.
The anticipated cuts extend declines from January, when the premium fell to roughly sixty cents per barrel.
Other grades such as Arab Extra Light are also likely to see modest downward adjustments, while Arab Medium and Arab Heavy are forecast to remain flat or decline by around ten cents.
The expected pricing move reflects sustained oversupply pressures, with production increases from the Organisation of the Petroleum Exporting Countries and its allies, combined with robust output growth in the United States and other non-OPEC producers.
Global supply dynamics are further highlighted by projections from international energy agencies that supply could outpace demand by several million barrels per day next year, underscoring downward pressure on benchmark and official selling prices.
Saudi Aramco generally announces its monthly official selling prices around the fifth of each month, and its decisions often influence pricing strategies across the Middle East, affecting crude shipments totalling millions of barrels per day to Asian markets.
The potential price cuts come as refiners in Asia navigate a landscape of falling spot premiums and well-stocked inventories, prompting expectations that lower official prices may support continued demand in a competitive market.
