Oil Daily | Saudi Arabia Lowers Asia Oil Prices Amid Demand Fluctuations, Analysts Question Oversupply

【Global Oil Supply and Demand】

Saudi Arabia has cut its official selling price for crude oil deliveries to Asia in January, due to weaker-than-expected demand in the region. Oil imports into Asia averaged 26.58 million barrels daily over the first 11 months of the year, a decrease of 310,000 barrels daily compared to the previous year. However, signs of demand recovery have emerged, with Asian oil imports for November averaging 27.05 million barrels daily, led by China's increased imports.

Saudi Arabia's decision to cut oil prices for January deliveries has raised concerns about a potential oversupply next year. Nonetheless, some analysts argue that oil demand is underestimated, and oversupply concerns may be exaggerated, potentially leading to market adjustments by 2025.


【Oil-Producing Countries Dynamics】

Saudi Arabia is reducing oil prices for Europe and maintaining prices for the U.S., reflecting their strategy amid changing demand patterns. The kingdom remains the largest oil supplier to Asia but faces challenges with fluctuating demand.


【Latest Oil Policies】

OPEC's recent decision to delay production cut reversals might result in a smaller supply overhang than anticipated, despite perceived weaker demand from China. This move could impact future market dynamics, with ING analysts noting it may not push the market into deficit next year.


【Others】

An alliance of Islamist rebels has taken control of Syria, with President Bashar Assad fleeing to Russia, marking a significant shift in Middle Eastern politics. This development affects the influence of Russia and Iran in the region and is seen as a potential advantage for Israel and Turkey. Israel has moved to secure the buffer zone near the Golan Heights, expressing its intent to prevent hostile forces from establishing positions on its border.