Saudi Arabia will cut crude oil prices in February in all markets, including its main market in Asia. Bloomberg reports this. The Saudi state oil company, Saudi Aramco, expects the weakness in the market to continue and wants to anticipate it in a timely manner.

For now, it is not a concern that expected oil consumption in February and March will be lower than during the peak of winter. During that period, refineries often shut down facilities for routine maintenance. In addition, strong global supply – including from the United States – increases the chances of a surplus. Earlier this year, a potential surplus forced the OPEC+ group, led by Saudi Arabia and Russia, to extend production cuts.

Read also | Russian oil supplies are threatened with disruption

State producer Saudi Aramco cut the price of Arabian Light oil – the Saudi oil standard – in Asia by $2 a barrel to $1.50 a barrel above the benchmark. That’s more than the estimated cut of $1.25 per barrel, according to a Bloomberg survey of refiners and traders. Aramco also reduced prices for February deliveries to northwest Europe, the Mediterranean and North America.

Global decline

Global oil prices fell in 2023 for the first time since 2020. So far, the market has paid little attention to concerns about the war between Israel and Hamas and the potential escalation of unrest in the Middle East. The attacks launched by Houthi militants on commercial ships crossing the Red Sea have not yet led to an interruption of supplies.

Read also | “Shell’s climate policy is completely at odds with the Green Promise.”

The OPEC+ production cuts are also aimed at preventing oil from accumulating in inventory, amid fears that a sluggish economy will reduce global demand. Saudi Arabia is bearing most of the burden, with voluntary production cuts of 2 million barrels per day during the first quarter and possibly longer.