Tue, Mar 12, 2019 - Page 11 News List

Saudi Arabia to cut its crude oil exports: official

Reuters, DUBAI, United Arab Emirates

Saudi Arabia plans to cut its crude oil exports next month to below 7 million barrels per day (bpd), while keeping its output well below 10 million bpd, a Saudi Arabian official said yesterday, as the kingdom seeks to drain a supply glut and support crude oil prices.

State-owned Saudi Aramco’s oil allocations for next month are 635,000 bpd below customers’ nominations, which are the requests made by refiners and clients for Saudi Arabian crude, the official said.

“Despite very strong demand from international waterborne customers at more than 7.6 million bpd, customers were allocated less than 7 million bpd,” the official said, adding that Saudi Arabian exports this month would also be below 7 million bpd.

Oil prices have been supported this year by output cuts by OPEC and its allies. US sanctions on the oil industries of OPEC members Iran and Venezuela have also tightened supplies.

Benchmark Brent Crude yesterday climbed above US$66 a barrel, helped by comments by Saudi Arabian Minister of Energy, Industry and Mineral Resources Khalid al-Falih that an end to OPEC-led supply cuts was unlikely before June and a report showed a fall in US drilling activity.

OPEC, Russia and other producers, known as OPEC+, agreed in December last year to reduce supply by 1.2 million bpd from Jan. 1 for six months.

“Saudi Arabia is demonstrating extraordinary commitment to accelerating market rebalancing,” the official said, adding that the kingdom expected other OPEC+ nations to show similar levels of contributions and high conformity to agreed cuts.

Saudi Arabian crude exports to the US market have slowed in past weeks, according to the International Energy Agency (IEA), while Asia’s crude demand is set to drop in the second quarter due to seasonal refinery maintenance which would limit supply.

Crude production is set to continue expanding in the US thanks to shale oil, with the nation becoming a net exporter from 2021, a development which should reinforce global energy security, the IEA said yesterday.

Additional reporting by AFP

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