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].

Core Viewpoint - Saudi Arabia has significantly reduced its official selling price (OSP) for crude oil to Asia in December, following the OPEC+ decision to halt output increases in early 2026 [1][3]. Group 1: Price Adjustments - Saudi Aramco will sell its "Arab Light" grade to Asian buyers at a premium of $1.00 per barrel above the Oman/Dubai average for December, a decrease of $1.20 from November [2]. - The Arab Medium and Arab Heavy grades were each cut by $1.40 to premiums of $0.05 and $0.10 per barrel, respectively, while the Arab Extra Light grade saw a drop of $1.20 to a premium of $1.30 per barrel [2]. Group 2: Market Dynamics - The price adjustments reflect a well-supplied Asian market with increasing crude volumes and Saudi Arabia's aim to maintain competitiveness and market share [4]. - The price cut provides a more attractive feedstock cost for Asian refiners, potentially stimulating increased term nominations or spot buying of Saudi crude [5]. Group 3: Demand and Supply Outlook - Traders are closely monitoring demand from Asian refiners for December, particularly whether spot flows of Saudi barrels will increase [6]. - The lower premium also indicates concerns about future demand and the risk of oversupply in the market [5].