Saudi Arabia cuts Feb Arab Light crude price to Asia to 27-month low

Saudi Arabia cuts Feb Arab Light crude price to Asia to 27-month low

An employee rides a bicycle next to oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia. — Reuters file

Published: Sun 7 Jan 2024, 8:54 PM

Top oil exporter Saudi Arabia on Sunday cut the February price of its flagship Arab Light crude to Asian customers to the lowest level in 27 months, a company statement showed, amid competition from rival suppliers and concerns about supply overhang.

Saudi Aramco slashed the official selling price (OSP) for February-loading Arab Light to Asia by $2 a barrel from January to $1.50 a barrel over Oman/Dubai quotes, a level last seen for November 2021.

The price cut, the biggest in 13 months, is in line with market expectations, as refiners called for competitive prices from Saudi Arabia comparing to crude oil supplied from other Middle Eastern producers and the arbitrage cargoes from the Atlantic Basin.

“Saudi crude is still relatively more expensive compared to other regional crude. But we are happy enough to see such prices, making it much more affordable for us,” said a trader with a North Asian refinery.

The Asian physical oil market softened over the past month, reflecting expectations of less supply tightness in the near term and weaker demand as some Asian