Saudis to cut oil exports in April
7m bpd Threshold to be implemented by Aramco next month
dubai — Saudi Arabia plans to cut its crude oil exports in April to below seven million barrels per day, while keeping its output well below 10 million bpd, a Saudi official said on Monday, as the kingdom seeks to drain a supply glut and support oil prices.
State-owned Saudi Aramco’s oil allocations for April are 635,000 bpd below customers’ nominations, which are the requests made by refiners and clients for Saudi crude, the official said.
“Despite very strong demand from international waterborne customers at more than 7.6 million bpd, customers were allocated less than seven million bpd,” the official said, adding that Saudi exports in March would also be below seven million bpd.
Oil prices have been supported this year by output cuts by the Organisation of the Petroleum Exporting Countries and its allies. US sanctions on the oil industries of Opec members Iran and Venezuela have also tightened supplies.
Benchmark Brent climbed above $66 a barrel on Monday, helped by comments by Saudi Oil Minister Khalid Al Falih that an end to Opecled supply cuts was unlikely before June and a report showed a fall US drilling activity.
April allocations by Aramco show “a deep cut of 635,000 bpd from customer requests for its crude oil”, the Saudi official said. “This will keep production well below 10 million bpd in April,” the official said, adding that this was also below the 10.311 million bpd that the kingdom had agreed as its production target under the Opecled deal on cutting supplies. Oil prices rose on Monday, lifted by comments from Al Falih and a report showing a fall in US drilling activity. US West Texas Intermediate (WTI) crude oil futures were at $56.73 per barrel at 1320GMT, up 66¢, or 1.18 per cent from their last close. Brent crude futures were at $66.49 per barrel, up 75¢, or 1.14 per cent.
Prices were also buoyed by Baker Hughes’ latest weekly report showing the number of rigs drilling for new oil production in the US fell by nine to 834. —