It looks like it could be a girth gall, especially if he's been ridden a lot lately. Did you recently switched to a new cinch, like a neoprene one? A friend of mine had a horse that would gall from neoprene. It looked similar.
It will probably heal on it's own (if it's a girth gall) just by not using the girth that did it. But if you want to put something soothing on it, there are ointments made for that. "Corona Ointment" is one but I've seen others. I know the Corona Ointment has a lot of lanolin in it.
There's a lot of stupid out there!