Saudi Arabia Slashes May Oil Prices for Asia Amid OPEC+ Output Hike

Saudi Arabia, the world’s top oil exporter, has cut its May crude oil prices for Asian buyers to the lowest level in four months. State-owned Saudi Aramco lowered the official selling price (OSP) for its flagship Arab Light crude by $2.30 to $1.20 per barrel above the Oman/Dubai average, marking the sharpest drop in over two years and the second consecutive monthly decline.

This price cut follows a surprise move by eight OPEC+ nations to accelerate oil production increases, adding 411,000 barrels per day in May—three times the initially expected boost and roughly 0.4% of global supply. The decision, coupled with rising global trade tensions, led to an 11% plunge in global oil prices for the week ending April 4, pushing prices to over three-year lows.

Analysts had forecasted a cut of $1.80 to $2 per barrel for Arab Light in Asia, reflecting falling benchmark prices and increased Russian crude exports to the region after sanctions-related disruptions early in the year. In March, Dubai crude's spot premium averaged $1.38 per barrel, significantly down from $3.33 in February.

For May, Aramco also reduced prices for other Asian crude grades by $2.30 per barrel. U.S.-bound exports saw a modest $0.20 cut, with Arab Extra Light priced at $5.85 above ASCI. In Europe, reductions were more moderate at $0.50 across most grades, with Arab Light for Northwest Europe now at $2.55 over ICE Brent and Mediterranean-bound crude at $2.35.

These strategic pricing adjustments reflect shifting market dynamics and increasing competition in Asia, especially as Russian supply rebounds and OPEC+ ramps up output.