Saudi Arabia appears ready to trim the price of its crude oil exports to Asia once again in February, marking what refiners expect will be the third straight month of reductions. The move comes as global supply remains abundant and Middle Eastern spot benchmarks continue to soften — a combination that is reshaping pricing dynamics across the region.
Why Another Price Cut Is on the Horizon
According to a Reuters survey of Asian refiners, the world’s largest crude exporter is likely to lower the official selling price (OSP) of its flagship Arab Light crude by $0.10 to $0.30 per barrel. If implemented, this adjustment would bring Arab Light’s premium to the Oman/Dubai benchmarks down to $0.30–$0.50, the lowest level seen in more than five years.
For Asian buyers — who collectively represent Saudi Arabia’s most important export market — the anticipated reduction reflects a broader trend: ample supply and easing regional benchmarks. Since early November, indicators such as the cash Dubai premium to swaps have steadily declined, signaling a softer market environment.
Not All Grades Will See the Same Adjustment
While Arab Light is expected to see the steepest cut, refiners suggest that other Saudi grades will experience more modest changes:
- Arab Extra Light: A likely reduction of $0.10–$0.20
- Arab Medium: Expected to remain flat or fall by $0.10
- Arab Heavy: Also likely to stay unchanged or dip by $0.10
These smaller adjustments reflect the relative strength of heavier grades, which have benefited from robust demand in certain refining hubs.
The Bigger Picture: OPEC+ Output and Market Balance
The price softening isn’t occurring in a vacuum. The global market remains well supplied, in part because OPEC+ increased production in 2025, easing some of the tightness seen in previous years. At the same time, the group reaffirmed its plan to pause any further production increases in early 2026, signaling a cautious approach to managing supply.
Even so, the current supply cushion has given buyers more leverage — and Saudi Arabia appears to be responding accordingly.
Why Saudi Pricing Matters
Saudi Arabia typically announces its monthly crude pricing around the fifth of each month. While the kingdom rarely comments on its pricing decisions, its OSPs carry significant weight. As the region’s dominant exporter, Saudi pricing effectively sets the tone for roughly 9 million barrels per day of crude shipments from the Arab Gulf.
When Saudi Arabia adjusts its prices, other Middle Eastern producers often follow — meaning February’s expected cuts could ripple across the broader Asian crude market.