Saudi Arabia has reduced the premium for its Arab Light crude grade to 90 cents a barrel above the regional benchmark for January, down from $1.70 for December. This decision comes after OPEC+'s announcement to further delay the revival of oil output, reflecting concerns about weak market conditions.

In addition to the price cuts for Asia, Saudi Aramco has also lowered prices for north-west Europe and the Mediterranean markets, while maintaining prices for North America. The adjustments are in response to declining benchmark oil prices in London, which are currently just over $71 a barrel. Analysts are closely monitoring sluggish demand growth, particularly from China, which is expected to contribute to a global oil surplus next year.

The recent ceasefire between Israel and Hezbollah in Lebanon has also impacted market dynamics, reducing the risk premium previously factored into oil prices.