Global oil prices, tracked by Brent futures, have fallen to $71 per barrel, remaining below the $75 threshold after Saudi Arabia’s state-owned oil giant, Aramco, implemented deeper-than-expected price cuts for its Asian customers.
Aramco’s price reductions are attributed to delays in OPEC’s plans to control production, adding further pressure to efforts aimed at stabilizing global oil prices. For January, Aramco has set the price of its key Arab Light crude grade at a premium of just 90 cents per barrel above the regional benchmark.
In addition to the cuts in Asia, Aramco has also reduced prices for markets in northwestern Europe and the Mediterranean but has kept prices unchanged for North American buyers. Despite these price adjustments, Aramco continues to be a dominant player in the global oil market, ranking as the fourth-largest company worldwide by revenue, with $494 billion in 2024.
Crude oil prices have dropped nearly 9% since October, with Brent struggling to stay above $75 per barrel. This decline follows OPEC’s downward revision of its global oil demand forecast, which has occurred four times this year. On October 14, the organization lowered its 2024 global oil demand growth estimate to 1.93 million barrels per day (bpd), down from the previous forecast of 2.03 million bpd, and also reduced its 2025 forecast.
Since these adjustments, OPEC has struggled to maintain oil prices above the $75 mark. A London-based commodity analyst noted that OPEC is now focused on keeping Brent prices above $70 per barrel despite weak demand, particularly from China. “With China’s crude demand still low, OPEC’s efforts are only managing to hold the Brent price floor at $70,” the analyst stated.
In 2024, crude oil prices have faced persistent downward pressure, reflecting a prolonged market dip that began in the previous year. The year started with Brent futures at $80.55 per barrel, but bearish sentiment began to take hold in May when prices were unable to maintain gains despite higher trading volumes. Brent prices steadily declined from July to September, closing at $71.70 per barrel in September.
A brief recovery in October was short-lived, as OPEC’s revised demand forecast reignited bearish momentum, pushing prices down further to $71.89 per barrel by mid-November.
Saudi Aramco’s recent price cuts for its Asian customers are seen as a contributing factor to the ongoing fall in oil prices.
