Saudi Ara­bia said to cut Septem­ber oil sales to prized Asia mar­ket

Muscat Daily - - BUSINESS -

Sin­ga­pore - Saudi Ara­bia is said to have cut crude sales for next month to some buyers in the world’s big­gest oil mar­ket, lim­it­ing sales to prized buyers as part of its pledge to curb ex­ports and shrink a global glut.

State-run Saudi Ara­bian Oil Co will sup­ply lower vol­umes of crude than the amount some Asian cus­tomers re­quested for Septem­ber, with the cuts span­ning across grades, said peo­ple with knowl­edge of the mat­ter. Those re­duc­tions to­talled 1mn bar­rels across South Asia and South East Asia, said one of the peo­ple, who asked not to be iden­ti­fied. One pro­ces­sor in North Asia got ten per cent less than what it asked for, an­other per­son said.

Saudi Ara­bia is lim­it­ing car­goes to Asia, a prized mar­ket where it’s fac­ing com­pe­ti­tion from ri­vals in­clud­ing the US, to im­ple­ment an out­put-cut plan aimed at elim­i­nat­ing an over­sup­ply. The fail­ure of OPEC’s ef­forts amid ris­ing pro­duc­tion in Libya and Nige­ria and lower com­pli­ance to promised curbs by some na­tions has spurred the king­dom to take more ac­tion. In pre­vi­ous months this year, it had largely spared the re­gion from the ef- fects of its re­duc­tions.

One re­finer in South­east Asia was sub­jected to cuts for Septem­ber, while an­other in the re­gion re­ceived full vol­umes. Vol­umes to two other pro­ces­sors in North Asia were also re­duced, the peo­ple said. In pre­vi­ous months, most cus­tomers in Asia re­ceived the amount of crude they re­quested.

Saudi Ara­bia said last month that it planned to in­crease pres­sure on na­tions that didn’t com­ply with their pledge to cut out­put as part of deal be­tween OPEC and other coun­tries such as Rus­sia through next March. Com­pli­ance to cuts fell to 86 per cent in July, the low­est level since January, ac­cord­ing to a Bloomberg sur­vey. Bench­mark Brent crude has dropped about eight per cent this year as signs of ris­ing global sup­ply eroded op­ti­mism that the curbs are re-balancing the mar­ket.

Saudi Ara­bia has pre­vi­ously been said to cut some vol­umes of its Arab Medium and Arab Heavy grades and com­pen­sated for those re­duc­tions by of­fer­ing higher amounts of its Arab Light and Arab Extra Light va­ri­eties.

The fail­ure of OPEC’s ef­forts amid lower com­pli­ance to promised curbs by some na­tions has spurred Saudi Ara­bia to take more ac­tion

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