Saudi Arabia cuts oil prices after OPEC+ delays reviving output

Signage above the Saudi Aramco booth on day two of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) in Abu Dhabi, United Arab Emirates, on Tuesday, Oct. 3, 2023. The annual strategic energy conference runs from Oct 2-5. Photographer: Bloomberg/Bloomberg

Saudi Arabia is cutting oil prices for buyers in Asia by more than expected after OPEC+ further delayed an output revival, underscoring how the outlook for the market remains weak.

State oil producer Saudi Aramco will sell its main Arab Light crude grade at a premium of 90 cents a barrel to the regional benchmark in January, according to a price list seen by Bloomberg. That compares with $1.70 for this month. The company was expected to lower the premium by slightly less, to $1, according to a survey of traders and refiners.

Aramco also cut prices for north-west Europe and the Mediterranean. It made no change for North America.

Benchmark oil prices in London are lower down this year on concerns sluggish demand growth, especially in China, will leave the global market in a surplus next year. Brent crude is now just over $71 a barrel and trading in a tight range as a ceasefire between Israel and Hezbollah in Lebanon has so far held, largely eroding a risk premium that traders had priced into the market.

Earlier, OPEC+ — led by Saudi Arabia and Russia — agreed to push back production increases planned for the start of January by another three months, following two previous delays. The prospect of an impending oversupply leaves the group with the uncomfortable dilemma of whether to prolong production curbs well into 2025 or risk a price slump.