Saudi Arabia will cut key crude prices for buyers in all regions, including its main Asia market, for February amid persistent weakness in the market.
Oil consumption typically eases during February and March, with refiners using the period to shut some facilities for periodic maintenance.
At the same time, strong global supply, including from the US, is raising the likelihood of a surplus that forced the OPEC+ group, led by Saudi Arabia and Russia, to extend output cuts into this year.
State producer Saudi Aramco reduced its flagship Arab Light price to Asia by $2 to $1.50 a barrel above the benchmark. That's bigger than a $1.25 a barrel reduction estimated in a Bloomberg survey of refiners and traders.
Aramco also cut all prices for February delivery to Northwest Europe, Mediterranean and North America.
Global crude prices declined in 2023 for the first time since 2020. The market has so far shrugged off concern over the Israel-Hamas war and deepening Middle East turmoil.
Attacks by Houthi militants on merchant vessels transiting the Red Sea also haven't yet resulted in supply disruptions.
The OPEC+ group's production cuts are also aimed at preventing a buildup of oil in storage, amid concern a sluggish economy will crimp global demand.
Saudi Arabia is taking on the bulk of the burden, with voluntary cuts of 2 million barrels a day through the first quarter and possibly longer.