December 29, 2025 [Reuters]- Saudi Arabia, the world’s biggest oil exporter, is expected to lower the February price for its flagship Arab Light crude for Asian buyers for a third month, mirroring declines in the spot market due to ample supplies, sources said.

The February official selling price for flagship Arab Light crude will likely fall 10-30 cents a barrel to a premium of 30 cents to 50 cents to the average of Oman/Dubai quotes, six Asia-based refining sources said in a Reuters survey.

That would mark a third monthly decline, extending losses from a premium of 60 cents a barrel for January, the lowest in five years.

The February OSP for Arab Extra Light may decline by 10-20 cents, while that for Arab Medium and Arab Heavy may stay the same or dip by 10 cents, the survey showed.

In the spot market, cash Dubai’s premium to swaps rose last week, after having fallen since October amid abundant supplies. It has averaged 61 cents per barrel so far this month, down from 88 cents in November, and is half of October’s average.

The pressure came from output hikes from the Organization of the Petroleum Exporting Countries and its partners – a group known as OPEC+ – as well as production growth in the U.S. and other producers.

Eight OPEC+ members have paused oil output hikes for the first quarter of 2026 after releasing some 2.9 million barrels per day into the market since April 2025.

Global oil supply will exceed demand by 3.84 million bpd in 2026, according to figures from the International Energy Agency’s latest monthly oil market report.

Meanwhile, the latest disruptions in Venezuelan oil exports have had a minor impact on the Middle East market. Oil from the Latin American producer accounted for about 1% of global supply, while the majority of its exports went to smaller-sized independent refiners in China.

Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting about 9 million bpd of crude bound for Asia.

State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.

Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.