Saudi Arabia has lowered the official selling price of its Arab Light crude for Asian buyers in January to sixty cents a barrel above the Oman/Dubai benchmark, the lowest premium in five years. The move reflects growing signs of surplus in the global oil market. The premium has now fallen for a second month, down from one dollar for December.
The weaker pricing comes as oil supplies rise worldwide. OPEC and its partners, led by Russia, have been increasing output, although eight members of the group have paused further hikes for the first quarter of 2026 after raising production targets by about 2.9 million barrels per day since April last year.
Additional supply from the United States and Brazil is also contributing to concerns of a potential glut. In its November outlook, OPEC revised its forecast for next year to a small surplus of about twenty thousand barrels per day, compared with its earlier expectation of a large deficit. It also trimmed its 2026 demand estimate for OPEC+ crude by one hundred thousand barrels per day.
The cut follows a steady decline in the cash Dubai market, where the premium over swaps has dropped to an average of seventy cents so far in December compared with ninety cents in November. Saudi Arabia’s crude pricing typically influences rates set by Iran, Kuwait and Iraq, shaping the cost of around nine million barrels per day of oil headed to Asia.
