Saudi oil prices fall to four-month low after OPEC+ increases output

OPEC+ nations' surprise move to increase output by 411,000 bpd in May prompts Saudi Arabia to cut oil prices.

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Saudi Arabia, the world’s largest oil exporter, has lowered crude oil prices for Asian buyers in May to their lowest level in four months. The price reduction follows OPEC+ oil group's unexpected decision to boost supply.

State oil giant Saudi Aramco reduced its May official selling price (OSP) for its Arab Light crude by $2.30, bringing it to $1.20 above the average Oman and Dubai prices, according to a pricing document released by the company.

Additionally, Aramco lowered the April prices for other grades sold to Asia by $2.30 per barrel. This marks the second consecutive month of price cuts.

The price decrease follows a surprising move by eight OPEC+ nations, who on Thursday decided to accelerate their plan to phase out oil production cuts, increasing output by 411,000 barrels per day in May. This move has contributed to oil prices extending their earlier sharp losses.

Before the announcement, the price for Arab Light crude had been expected to drop by $1.80 to $2, as noted in a Reuters survey that tracked steep declines in benchmark prices in March.

In March, the spot premium for Dubai averaged $1.38 per barrel, a significant drop from $3.33 per barrel in February, partly due to an increase in Russian oil supply to Asia since March.