Saudi Arabia has announced that it is slashing crude prices again, but this time across all grades headed to Asia. Saudi Aramco, the state oil company, announced a $1 per barrel drop in the price of its flagship Arab Light crude for October shipments, according to a latest pricing sheet.
The development is a lot steeper than expected, with Bloomberg’s survey showing that refiners and traders were only betting on a 50-cent cut. The new price premium sits at $2.20 a barrel above the regional benchmark, which is low, especially compared to what buyers were expecting.
Saudi Arabia announces plans to cut oil prices for Asia
This move comes after OPEC+, a group of oil producers led by Saudi Arabia and Russia, announced that it won’t back off its production hike plan. Over the weekend, they decided to increase supply through September 2026, starting with an extra 137,000 barrels per day from October.
The goal is to grab back some of the market share they lost to other global producers. The move comes as global crude prices continue to drop, with the London Brent dropping by around 12% so far this year, sitting near $66 a barrel, per data from CNBC.
OPEC+ ramps up production amid early barrel dumps
Despite talks of a possible oversupply, Saudi Arabia and its allies are determined to push ahead. What was expected to be 1.65 million barrels per day held off the market until the end of 2026 is now coming back much sooner, and it is a huge change from the typical slow, calculated rollouts the OPEC+ has historically stuck to.
UBS analysts see oil prices slipping some more, to $62 by year-end. Goldman Sachs thinks it could go as low as the low $50s next year. Yet OPEC+ isn’t showing signs of hitting the brakes. Even with the recent production hikes, Western stockpiles haven’t ballooned yet. That’s where most oil pricing benchmarks are based.
So far, there’s no massive glut, but refiners in Asia are still nervous. After two straight months of price increases, this price cut might feel like a break. Still, the margin pressure is real, and there’s fear that demand might weaken as winter kills summer travel demand in the U.S., Europe, and the Middle East.
