RIYADH: Saudi Aramco on Sunday cut the February official selling price for its flagship Arab Light crude to Asian customers to the lowest level in 27 months, according to an official statement.

The oil giant reduced the price for February-loading Arab Light to Asia by $2 per barrel from January to $1.50 a barrel versus the Oman/Dubai average.

The price cut is in line with market expectations, as refiners called for competitive prices from Saudi Arabia compared to crude oil supplied from other Middle Eastern producers and the arbitrage cargoes from the Atlantic Basin.

The Asian physical oil market softened over the past month, reflecting expectations of less supply tightness in the near term and weaker demand as some Asian refineries are scheduled to shut down for maintenance in the spring season of the Northern Hemisphere.

Oil prices settled higher on Friday as US Secretary of State Antony Blinken began a weeklong tour through the Middle East in an attempt to contain regional tensions stoked by the Israel-Hamas conflict.

Crude rebounded from losses on Thursday triggered by hefty increases in US gasoline and distillate stocks, and both benchmarks ended the first week of the year higher.

“With the tensions in the Middle East, the geopolitical trading premium has to get pushed higher,” said John Kilduff, partner at Again Capital LLC. “It’s hard for traders to fight the headlines.”

Shipping giant Maersk said it will divert all vessels away from the Red Sea for the foreseeable future, warning customers of disruptions.

A US government report showing employment grew in December would support demand in the coming year, Kilduff said.