Saudi Arabia Set to Slash Oil Prices to Asia for January

Core Viewpoint - Saudi Arabia is expected to reduce crude oil prices for Asia in January to the lowest premium in five years, aiming to maintain market share amid high supply and declining Middle East benchmarks [1]. Pricing Adjustments - Aramco is likely to cut the official selling price (OSP) of Arab Light crude by $0.30-$0.40 per barrel, setting the premium at $0.60-$0.70 per barrel above the Oman/Dubai benchmark for January loadings [2]. - The premium for January will be the lowest since January 2021, following a previous reduction in December from $2.20 to $1.00 per barrel [3]. Market Conditions - The market anticipates this price reduction due to a $0.30 decline in Middle East spot benchmarks in November compared to October, alongside increased output from OPEC+ [4]. - Saudi Arabia is raising production significantly, reflecting its largest share of OPEC+ quotas [4]. Upcoming Announcements - The pricing announcement from Saudi Arabia is expected next week, following the OPEC+ meeting, where producers are likely to maintain their decision to pause production increases in early 2026 [5]. - Saudi Arabia typically announces crude pricing around the fifth of each month, influencing the pricing strategies of other major Middle Eastern oil producers [6].