Saudi Arabia's oil prices for January could drop to a five-year low for Asian buyers, according to industry sources. This follows a decline in spot benchmark prices and a surplus in global oil supply. The January official selling price (OSP) for Arab Light crude is expected to fall by 30-40 cents per barrel, with other grades potentially dropping by 30-50 cents. This trend is driven by ample supplies and a slowdown in demand growth, as the OPEC+ alliance increases output. The move could boost term demand from China, where independent refiners have received import quotas for 2026. However, this reduction in prices may also impact the prices of Iranian, Kuwaiti, and Iraqi crude bound for Asia, affecting approximately 9 million barrels per day. Saudi Aramco, the state oil giant, sets its prices based on customer recommendations and market factors, but officials remain tight-lipped about monthly OSPs.
