- Saudi Arabia increases February crude exports to Asia after price cuts.
- Price cuts aim to boost competitiveness amid signs of global oversupply.
- China remains the top buyer, while Middle East spot crude prices weaken.
Saudi Arabia is expected to maintain elevated crude oil sales to East Asian markets following its third consecutive monthly price cut, as global energy supplies remain abundant and oil demand dynamics shift. Traders familiar with state-owned Saudi Aramco’s crude allocations said refiners in key markets such as Japan and South Korea will receive significantly more Saudi crude in February loading programs than is typical.
These traders, who spoke on condition of anonymity because they aren’t authorized to comment publicly, did not receive an immediate response from Saudi Aramco when asked for confirmation.
This latest round of oil price reductions came after major crude oil benchmarks posted their steepest annual declines since 2020, reflecting growing concerns about a global oil glut. By lowering the cost of its crude to Asian customers, Saudi Arabia has made its barrels more competitive with spot market crude grades such as those from Abu Dhabi, according to oil market participants.
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The increased February crude allocations suggest at least a 15% rise in exports above Saudi Arabia’s average oil shipments to East Asia, which stood at about 2.1 million barrels per day during the first ten months of last year, based on analytics from ship-tracking firm Kpler Ltd. Crude oil shipments began trending higher in November and have continued into the new year.
China, the largest importer of Saudi crude, is also taking substantial volumes, with around 48 million barrels booked for February crude loading, only slightly less than the 49–50 million barrels slated for January oil deliveries.
Elsewhere in the Middle East crude market, the broader spot oil market remains weak. Other producers, including the United Arab Emirates and Qatar, are experiencing compressed oil price differentials, while Dubai crude benchmark pricing suggests a slight contango market structure, where future oil prices trade higher than current prices, indicating bearish market sentiment.