The sources indicated that the world’s largest exporter of oil, Saudi Arabia, would reduce the flagship Arab Light crude price to Asian customers for the third month of February, following a fall in the spot market due to surplus suppliers.
Sources reported in a Reuters survey that the official selling price of flagship Arab Light crude will drop 10-30 cents a barrel to a premium of 30 cents to 50 cents to the average of Oman/Dubai quotes in February, according to six Asia-based refining.
Therefore, it would be a third straight month of decline, adding to losses of a premium of 60 cents a barrel in January, the lowest in five years. The survey stated that the February OSP of Arab Extra Light can fall by 10-20 cents, but Arab Medium and Arab Heavy can remain at the same level or fall by 10 cents.
Cash Dubai increased its swap premium to the spot market last week, reversing a downward trend since October, as supplies have been high. It has been averaging 61 cents a barrel this month, compared to 88 in November, and 50 percent of the average in October.
A combination of output increases in the Organization of the Petroleum Exporting Countries and its allies, referred to as OPEC+, together with production expansion in the U.S. and other producers, led to the pressure.
Eight OPEC+ members have suspended the increase in oil production in the first quarter of 2026 after leaking 2.9 million barrels per day into the market since April 2025.
According to figures from the International Energy Agency’s latest monthly oil market report, the global oil supply will meet demand by 3.84 million bpd in 2026.
However, the recent disturbances in the Venezuelan oil exports have had a very slight effect on the Middle East market. The Latin American producer supplied an estimated 1 percent of global supply, and most of its exports by the producer were to smaller-sized independent refiners in China.
The Saudi crude OSPs are typically published on or around the fifth of every month and dictate the direction of the Iranian, Kuwaiti, and Iraqi prices, which cover approximately 9 million bpd of the crude exported to Asia.
Saudi Aramco, a state oil conglomerate, fixes its crude prices at the suggestion of its customers and after estimating the variation in the price of its oil within the last month, pegged on its yields and product prices.
