In a move signaling a global supply surplus, Saudi Aramco announced on February 6, 2026, that it is slashing the Official Selling Price (OSP) for its flagship Arab Light crude for Asian buyers to its lowest level since late 2020.
For March 2026 loadings, the price has been set at parity with the Oman/Dubai regional benchmark, removing the $0.30 per barrel premium it held in February.
1. Key Pricing Adjustments (March 2026)
The price cuts were systematic across major markets and heavier grades, though lighter crudes saw a different trend.
| Crude Grade (to Asia) | New Price (vs. Oman/Dubai) | Change (YoY) | Historical Significance |
| Arab Light | Parity ($0.00) | ↓ $0.30 | Lowest since December 2020. |
| Arab Medium | Discount | ↓ $0.40 | Lowest since mid-2020. |
| Arab Heavy | Discount | ↓ $0.40 | Lowest since mid-2020. |
| Extra Light | Premium | ↑ $0.20 | Divergent trend for lighter grades. |
- Global Cuts: Aramco didn’t stop at Asia; it reduced prices for all grades heading to the United States (by $0.10) and the Mediterranean/Northwest Europe (by $0.30).
2. Why the 5-Year Low?
The pricing strategy reflects a “fundamentally altered” market in early 2026:
- The Oversupply Factor: Global supply has outpaced demand growth, largely due to OPEC+ increasing production by 2.9 million barrels per day since April 2025.
- Americas Growth: Robust production from the U.S., Guyana, and Brazil has added significant non-OPEC volume to the market, forcing Saudi Arabia to compete more aggressively for market share.
- The “Contango” Market: The Dubai market has shifted into a contango structure (where future prices are higher than spot prices), indicating a current lack of urgency among refiners for immediate barrels.
3. Market Sentiment: “Smaller than Expected”
Despite hitting a 5-year low, the $0.30 cut was actually smaller than what many analysts and refiners had predicted (some anticipated a cut of $0.50 to $0.85).
- Management Confidence: CEO Amin Nasser remains publicly optimistic, stating that fears of an oil glut are “overblown.”
- Price Resilience: While OSPs fell, global benchmarks like Brent crude remained trading above $68 per barrel on February 6, supported by geopolitical tensions between the U.S. and Iran.
4. Impact on Asian Refiners
The price drop is being viewed as a “significant cost relief” for Asian refiners, particularly in India and Thailand:
- Thai Refineries: Shares of Thai oil companies like Bangchak (BCP) and Thai Oil (TOP) rose by over 2% following the news, as the lower OSP directly improves their refining margins (crack spreads).
- Indian Strategy: The lower Saudi prices provide Indian refiners with a more competitive alternative as they simultaneously pivot away from Russian crude and increase imports from the U.S. and Venezuela.
Conclusion: Prioritizing Market Share
By pricing its main crude at parity for the first time in years, Saudi Aramco is prioritizing market share preservation over revenue optimization. This “calibrated retreat” suggests that the world’s largest exporter is preparing for a long-term competitive stretch against rising production from the Americas while waiting for a projected demand recovery in late 2026.
