OPEC leader to pare oil exports to U.S.

After the U.S. market was spared from OPEC output cuts, the Saudi Arabian energy minister announced plans to “markedly” reduce exports to the kingdom’s political ally in the coming weeks in an effort to reduce swollen crude inventories in the world’s biggest consumer.

“Exports to the U.S. will drop measurably,” Energy and Industry Minister Khalid al-Falih told reporters after a Thursday meeting between the Organization of the Petroleum Exporting Countries and other major producers in Vienna. Saudi crude shipments to the U.S. will fall below 1 million barrels a day next month, said two people briefed on the kingdom’s oil policy, a reduction of more than 15 percent from the average so far this year.

Al-Falih spoke after the group of 24 nations agreed to extend their production curbs for another nine months until the end of March 2018, a decision that followed five months of cuts that failed to make a significant dent in oil stockpiles in developed economies.

The move will shift the focus of Saudi export reductions toward the U.S. — where customs data allow near real-time monitoring of shipments — and away from less transparent markets in Asia and Europe.

The slump in oil prices after Thursday’s agreement showed growing skepticism about the effectiveness of the cuts.