SINGAPORE, April 7, 2025 — Saudi Arabia, the world’s largest oil exporter, has cut its crude oil prices to Asia for May, marking the lowest level in four months as the OPEC+ alliance prepares to ramp up production.
According to a pricing document from Saudi Aramco, the May official selling price (OSP) for its flagship Arab Light crude was reduced by $2.30 per barrel, bringing it to just $1.20 above the average of Oman and Dubai crude benchmarks. This marks the largest price drop in over two years, and the second consecutive monthly cut.
Prices for all other Saudi crude grades bound for Asia were similarly reduced by $2.30 per barrel.
OPEC+ Production Surprise Triggers Market Response
The steep price adjustment follows a surprise decision by eight OPEC+ member nations last week to accelerate their planned output increases. The group will boost production by 411,000 barrels per day in May, nearly triple the anticipated increase, adding approximately 0.4% to global supply.
This decision, coupled with growing concerns about a widening global trade war, pushed international oil prices down nearly 11% in the week ending April 4, reaching three-year lows.
Market Expectations and Competitive Pressure
Prior to the announcement, analysts surveyed by Reuters had predicted a cut of around $1.80 to $2.00 per barrel in the Arab Light OSP, reflecting March’s steep benchmark losses.
The Dubai crude spot premium — a key pricing indicator — averaged just $1.38 per barrel in March, down significantly from $3.33 in February. Analysts also pointed to the return of Russian crude supplies to Asia, after earlier sanctions-related disruptions, as a factor pressuring Saudi export pricing.
Strategic Implications
The latest price cuts underscore Saudi Arabia’s intention to maintain market share in Asia, where demand is softening amid economic headwinds and rising competition from Russian and Iranian supplies. For refiners across Asia, the new pricing offers relief from squeezed margins and may prompt increased intake of Saudi barrels in coming months.
Meanwhile, Saudi Aramco is likely to remain agile in its pricing strategy as OPEC+ balances market stability with national revenue targets.
