Saudi Arabia to trim oil exports in the coming days; oil producers to shore up tumbling prices

   
 

 

New Delhi, January 10: Saudi Arabia yesterday announced that it would slash it’s oil exports by 8 lakh barrels per day in the month of January. This procedure of cropping the exports will extend by 1 lakh bpd would continue in the forthcoming months. Energy Minister Khalid al-Falih said, “The kingdom, the world's top crude supplier, would cut its exports to 7.2 million bpd in January, down from 8.0 million bpd in November.”

 

"We are serious about restoring balance to the market. We are concerned about volatility in the oil market. We have seen peaks and drops in prices (that are) completely unjustified by the fundamentals." Falih told a press conference in Riyadh.

 

Benchmark market crude climbed back to $60 per barrel on Wednesday for the first time in several weeks following the Saudi announcement, which came as producers began implementing a new deal to trim output. Also the OPEC and its allies decided last month to cut their overall output by 1.2 million bpd from January, to boost prices hit by a supply glut and fears demand could plummet.

 

 

Falih said that Saudi production had fallen to 10.2 million bpd, down from the roughly 11 million bpd and that it was pumping when oil producers decided to end a production cut deal in the month of May.

 

They have partially rebounded in the past few days after a new deal came into effect, under which OPEC and non-OPEC oil producers agreed to trim output by 1.2 million bpd. “That figure is more than sufficient to bring balance to the market," said Falih, adding that the production cut would trim excess supply.

 

ndia’s region-wise crude oil import data for the past five years shows Middle-East countries have increased their market share while the share of Africa and South America has decreased during the period. India imported around 36 MT crude oil from Saudi Arabia in 2017-2018. In value terms, India imported $15,263 million worth of crude oil from Saudi Arabia last fiscal.

 

Saudi Arabia, the OPEC’s largest crude oil producer, which has traditionally been the largest supplier of crude to India, slipped to second place mainly because of over-confirming on production cuts decided by OPEC in January 2017 to rein in output and prop up global prices, reported the statement.