Saudi Arabia is expected to slash the prices for its crude bound for Asia in January to the lowest premium to benchmarks in five years, as the world’s largest crude exporter looks to preserve market share amid ample supply and falling spot Middle East benchmarks.
Saudi oil giant Aramco will likely reduce the official selling price (OSP) of its flagship Arab Light crude grade by $0.30-$0.40 per barrel to a premium of $0.60-$0.70 a barrel to the average Oman/Dubai benchmark for loadings to Asia in January, a Reuters survey of Asian refining sources showed on Friday.
The premium to Oman/Dubai would be the lowest since January 2021, as the Saudis are expected to slash OSPs for the Asian market for a second consecutive month.
Early in November, Saudi Arabia cut the price of Arab Light for Asia to a premium of $1.00 per barrel above the Oman/Dubai average for shipments in December, down from a $2.20 a barrel premium in October and November.
Now the world’s top crude exporter is poised to further slash the prices of Arab Light, Arab Medium, and Arab Heavy by between $0.30 and $0.50 per barrel, according to the Reuters survey of refiners.
The move is widely expected by the market as the spot benchmarks in the Middle East, including the cash Dubai premium to swaps, have slipped by about $0.30 per barrel in November compared to October.
Moreover, the market appears to be well supplied as OPEC+ raises output, and Saudi Arabia is raising production the most as its share of the quotas is the biggest.
The pricing announcement from Saudi Arabia is expected next week, after the OPEC+ meeting this weekend, at which producers are expected to stick with their decision to pause oil production increases in the first quarter of 2026.
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.
By Tsvetana Paraskova for Oilprice.com
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