- Saudi Arabia cuts December crude prices for Asia amid rising global supply.
- Saudi Aramco lowers prices across all crude grades after OPEC+ output hike.
- The move reflects concerns over potential oil surplus and slowing market demand.
In December, Saudi Arabia, the leading oil exporter, significantly lowered its crude prices for Asian customers, reacting to a market that is saturated as OPEC+ producers increase output. State oil behemoth Saudi Aramco established its December official selling price at $1 per barrel above the Oman/Dubai average, representing the initial price decrease since October after maintaining rates steady in November.
According to the document, the December rates for other grades—Arab Medium and Arab Heavy—declined by $1.40 each to five cents and 10 cents per barrel, while the price for Arab Extra Light decreased by $1.20 to $1.30 per barrel.
Also Read: Saudi Arabia May Raise November Crude Prices for Asia
The pricing choice was made soon after the Organization of the Petroleum Exporting Countries and its partners, known as OPEC+, decided to implement a small rise in oil production for December, followed by a halt in production increases during the initial quarter of the upcoming year. The producers' coalition chose to temper its efforts to regain market share due to increasing worries about a possible worldwide supply surplus.
Since April, OPEC+ has increased output targets by approximately 2.9 million barrels daily, which is roughly 2.7% of the worldwide supply, but has reduced the rate of increase from October due to forecasts of a possible oversupply. Saudi Aramco sets its crude oil prices by gathering input from clients and evaluating monthly fluctuations in its oil's value, which are affected by product prices and market returns.