Saudi Arabia to slash oil exports by 800,000 barrels per day

Marco Green
January 10, 2019

OPEC kingpin Saudi Arabia said Wednesday it would slash its oil exports by 800,000 barrels per day in January and promised further cuts as producers move to shore up tumbling prices.

"This certification underscores why every barrel we produce is the most profitable in the world, and why we believe Saudi Aramco is the world's most valuable company and indeed the world's most important", Minister of Energy, Industry and Mineral Resources Khalid Al-Falih said.

The collective production cut of 1.2 million bpd from OPEC and its Russia-led non-OPEC partners in the deal might not be enough, APICORP warns, but noted that "The dynamics of oil prices in 2019 will also depend in large part on OPEC's effectiveness in implementing the cuts, balancing the market and reinforcing the credibility of its signals". It is the third biggest producer after the United States and Russian Federation with around 10.6 million barrels per day.

"We are serious about restoring balance to the market", Falih told a press conference in Riyadh held to announce that the kingdom's vast oil reserves are even bigger than previously thought.

"We are concerned about volatility in the oil market", he said.

Brent crude had hit $85 a barrel in early October, but prices dived more than 40 percent over the following two months on oversupply and fears a trade war between the United States and China could slash demand.

"In conclusion, purely based on fundamentals, a collective cut of 1.2 mb/d between OPEC and its allies, high probability of supply losses from Iran, Venezuela, Libya and Canada, and global oil demand growth of 1.4 mb/d, the market will achieve balance in 2019".

With the calculation of the share of the joint field with Kuwait, the oil reserve makes up 266 billion barrels.

That the carbon intensity of Saudi Arabia's oil and corresponding gas flaring are among the very lowest in the world, and he called on the industry to use this metric alongside profitability.

Other reports by Click Lancashire

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