Market News and Key Data 1. On February 6, Saudi Arabia lowered the price of its primary crude grade for Asian buyers to the lowest level in several years, further indicating that global oil supply exceeds demand. Data shows that Saudi Aramco will reduce the price of Arab Light crude for Asian customers by 30 cents per barrel, aligning it with the March benchmark price for the region. This price cut is even deeper than the lowest expectations in surveys of refiners and traders. Nevertheless, it marks the lowest oil price set by Saudi Arabia since late 2020.

2. BP is seeking partners to help increase production at one of the oldest oil fields in the Middle East and share some of the associated costs. According to informed sources, the search for potential investors for Iraq’s Kirkuk oil field is already underway. The timing of any agreement remains uncertain, with one source indicating that the process is expected to extend into next year. Major oil companies are once again showing strong interest in Iraq, which possesses abundant crude resources that are often simpler and less expensive to extract compared to regions outside the Middle East. At the same time, BP is pursuing further international growth in oil and gas production, moving away from its previous five-year focus on clean energy and net-zero emissions.

3. On February 5, crude oil prices declined during early Asian trading hours following confirmation from both the White House and Iran’s foreign ministry that the United States and Iran will hold nuclear talks in Oman on Friday. The announcement of the upcoming negotiations contributed to the downward pressure on prices.

Investment Outlook In the short term, oil prices have become highly sensitive to developments in U.S.-Iran relations. Although formal nuclear negotiations between the two countries are scheduled to take place today, significant differences remain, making an agreement unlikely in the near term. Nonetheless, market participants should closely monitor any progress. Iranian oil is currently in strong competition with Russian crude, and the lifting of sanctions remains a key objective for Iran.

Strategy Oil prices are expected to fluctuate within a range in the short term, with a medium-term bearish outlook.

Risks Downside risks: Easing of sanctions on Russian and Iranian oil; macroeconomic black swan events. Upside risks: Tightening supply of sanctioned oil (Russia, Iran, Venezuela); large-scale supply disruptions due to conflict in the Middle East.