Saudi Arabia, the de-facto leader of OPEC and its allies, astonished oil traders with its lavish price cuts. State-owned Saudi Aramco slashed prices of its Arab Light blend in invoices for February deliveries. The world’s largest oil exporter made this gesture of generosity towards all its buyers.
Experts say that Saudi Arabia had to make this decision for obvious reasons: a global decline in energy demand. Nevertheless, the world’s largest oil exporter is likely to pump up oil production rates again and adjust its invoices accordingly in the future. In early January, Saudi Arabia invoiced crude oil shipped to its main Asian markets $1.5-2 a barrel higher than at present. Besides, Saudi Aramco cut petroleum prices for deliveries in February for customers in Northwestern Europe, Balkan countries, and North America.
Commodity experts caution that oil prices could fall considerably in the coming months because of worsening disagreement among the cartel's ranks and its allies. Nowadays major oil exporters, including Saudi Arabia, are taking urgent measures to reduce the dependence of their economies on commodity revenues.