Saudi Arabia has «dropped» the oil market, reducing the prices of its oil around the world

From the beginning of February, Saudi Arabia will reduce the price of its oil in all regions of the world. The reason for this was the expected seasonal decline in demand and the risk of a surplus in the market due to increased oil production in the United States. These factors have already led to the decision of OPEC+ (including Saudi Arabia and Russia) to extend the reduction in oil production for the current year.

The most significant price reduction is expected in the key Asian market for Saudi Aramco, where prices will decrease by $1.5-2 per barrel.

By the end of 2023, world oil prices fell for the first time since 2020, as Bloomberg notes. It is important to note that the market has so far ignored concerns about the conflict between Israel and Hamas, as well as Houthi attacks on merchant ships in the Red Sea.

Saudi Arabia's decision to lower prices led to a drop in Brent quotations below the level of $76 per barrel. The current quote is $75.46 per barrel. North American WTI crude collapsed to $70.56. 

In the Russian budget for 2024, the average price of Urals oil was set at $71 per barrel, and the discount of the Russian grade to Brent in mid-December reached the level of $20-22 per barrel.