General view of Aramco tanks and oil pipe at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018.
Saudi Aramco lowered the May official selling price (OSP) for its flagship Arab Light crude by $2.30, bringing it to $1.20 per barrel above the Oman and Dubai price average, according to a pricing document. Additionally, prices for other crude grades sold to Asia in April were also decreased by $2.30 per barrel. This marks the second straight month of price reductions by the company.
The OPEC+ alliance, which includes eight member countries, agreed on Thursday to accelerate the rollback of production cuts. Starting in May, they will increase output by 411,000 barrels per day. This unexpected move led to a further drop in oil prices, which had already been declining sharply. The decision reflects a coordinated effort to adjust supply in response to market conditions.
Before this announcement, a survey had predicted a smaller price drop for Arab Light crude in Asia, estimating a reduction of $1.80 to $2 per barrel. However, the actual cut exceeded expectations, aligning with broader declines in benchmark prices during March. The spot premium for Dubai, a key reference, averaged $1.38 per barrel in March, down from $3.33 per barrel in February, influenced by increased Russian oil supplies to Asia since early March.
Saudi Aramco’s pricing adjustments aim to maintain competitiveness in the Asian market, a significant destination for its exports. The company’s statement emphasized adaptability: “These adjustments reflect current market dynamics and ensure our crude remains attractive to buyers.” The reductions highlight Saudi Arabia’s response to evolving global demand and supply trends.
The OPEC+ decision and subsequent price cuts underscore the fluid nature of the oil industry. Saudi Arabia, as a major supplier, continues to play a central role in shaping market outcomes. The May price adjustments, finalized on April 06, 2025, will influence trade flows and consumption patterns in Asia over the coming months.
For Asian buyers, these lower prices could support increased purchases, though the broader impact on global oil balances remains under observation. Saudi Aramco’s actions, paired with OPEC+’s supply increase, signal a strategic shift to stabilize the market while addressing regional demand.
