Saudis Will Cut Oil Export to US
After flooding the US market in recent months, Saudi Arabia plans to slash exports to the world’s largest oil market in the coming weeks in an effort to dampen visible build-ups in crude inventories.
American-based oil refiners have been told to expect much lower shipments from the kingdom in January than in recent months following the OPEC agreement to reduce production, according to people briefed on the plans of state oil company Saudi Aramco, Bloomberg reported.
Saudi crude shipments to the US next month could even test the 30-year low set in late 2017 of 582,000 bpd, down about 40% from the most recent three-month average, the same people said, asking not to be named as the information is not public.
By shifting the focus of Saudi export reductions toward the US, Riyadh hopes to show to the market it is making good on its promise to cut supplies.
While the plan to slash Saudi exports to America may ultimately convince a skeptical oil market about the kingdom’s resolution to bring supply and demand in line, it may anger US President Donald Trump, who has used social media to ask the Saudis and OPEC to keep the taps open.
Saudi total exports are set to drop to around 7 million bpd in January, down from about 8 million barrels a day in November-December, one of the people said. Khalid Al-Falih, the kingdom’s energy minister, told reporters last week that Saudi production will drop in January to 10.2 million bpd, down from 11.1 million bpd in November.
source: Financial Tribune
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