December 1, 2023 [Oil Price]- Rising global crude stockpiles and weak demand could prompt Saudi Arabia to lower the price of Arab Light, its flagship crude, for Asian customers for January for the first time in seven months, a Reuters survey showed on Friday.

Saudi Aramco, the world’s largest crude oil exporter, could lower the price of Arab Light loading in January for Asia by $1 per barrel to around $3 a barrel over the Oman/Dubai average, the benchmark off which Middle Eastern crude exports to Asia are priced, according to the six respondents in the survey.

Earlier this week, a Bloomberg survey of analysts showed that Saudi Arabia was expected to reduce its official selling price for crude for Asian buyers. According to the survey sample, including a total of six refiners and traders, the move would be prompted by intensified competition for the Asian market and cheaper crude from the United States and Europe, as well as Guyana.

While the Bloomberg survey was conducted before the Thursday meeting of the OPEC+ group, the Reuters survey was carried out after OPEC+ announced underwhelming production cuts for 2024.

“The OPEC+ cut was not so deep. So, Saudi will have to secure its market share by lowering its oil prices,” one respondent in the Reuters survey said.

According to another respondent, Saudi Arabia will need to react to the market in which global inventories were building in November, with demand weakening.

Saudi Arabia typically announces its official selling prices (OSPs) for its crude to all regions for the following month around the fifth of each month, and Aramco does not comment on the pricing policy.

Last month, Saudi Arabia kept the price of its flagship crude grade for shipping to Asia in December unchanged from November’s pricing in a widely expected move amid weakening refining margins. Aramco set the price of its flagship Arab Light grade loading for Asia in December at $4.00 per barrel above the Oman/Dubai average.

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