Saudi Arabia has sharply reduced the official selling prices (OSPs) for its crude oil, particularly for Asian markets, ahead of a planned production increase in May. The most significant cut was for Arab Light crude, which will be priced $2.30 lower per barrel, now sold at a $1.20 premium over the Dubai/Oman benchmark. This marks the steepest price reduction in over two years, reflecting Saudi Arabia's response to weakening global oil demand and intense market competition.

The price cut comes in the wake of a steep decline in global oil prices, triggered by escalating trade tensions. President Trump’s recent announcement of widespread tariffs—especially targeting China—prompted swift retaliatory tariffs from Beijing, including those on U.S. oil and gas. This added downward pressure to prices. Meanwhile, OPEC+ unexpectedly announced a significant production increase, tripling its planned output boost from 135,000 barrels per day (bpd) to 411,000 bpd, citing a healthy market outlook despite the growing uncertainties.

The combined effect of these developments pushed international oil prices to their lowest levels since the pandemic began. Analysts were anticipating a price cut, but Saudi Arabia’s move exceeded expectations. Cuts for markets outside Asia were more modest—around $0.50 per barrel for Europe and $0.20 for the U.S. This marks the second consecutive month that Saudi Arabia has reduced its crude oil OSPs, highlighting growing concerns over market stability and sustained demand.