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Saudi Arabia cut the prices of all the crude grades it will be selling to Asia in February to the lowest premium to regional benchmarks in three months, amid the rapid spread of Omicron and higher OPEC+ supply to the markets.

The Kingdom, the world’s largest crude oil exporter, reduced the price of its flagship Arab Light crude grade for the Asian market by $1.10 a barrel to $2.20 per barrel over the Oman/Dubai benchmark, off which Middle Eastern exports to Asia are being priced. The premium over Oman/Dubai is the lowest for the Saudi Arab Light grade in three months, Reuters notes.

All Saudi grades sold in Asia in February will see their official selling prices (OSPs) reduced by between $1.00 and $1.30 per barrel. Industry officials had widely expected a cut in Saudi prices for Asia for February, after last month’s large increase in OSPs for January.

In December, Saudi Arabia raised its official selling prices for its Arab Light oil to Asia in January by $0.60 per barrel to a premium of $3.30 a barrel above the Oman/Dubai benchmark—the highest spread since before the pandemic.

The price hike in December for January loadings suggested expectations of strong demand, which in turn implied that Saudi Arabia was not all that worried about the Omicron variant that caused a more than $10 plunge in oil prices in late November, with Brent at one point dipping below $70 per barrel.

Today’s cut for February suggests that the world’s top oil exporter expects somewhat weaker demand in Asia with the Omicron surge and China’s zero-COVID policy, analysts say.

For customers outside Asia, Saudi Arabia left unchanged the prices of all its grades to the United States, slightly cut the prices for northwest Europe, and left OSPs for the Mediterranean region mostly unchanged, with the exception of a $0.20 per barrel cut in the price of Arab Light versus the ICE Brent benchmark.