Bid & Tender
Saudi Arabia Slashes November Crude Oil Allocation by 560,000 bpd

Date : Oct 10, 2017

Saudi Arabia has cut crude oil allocations for November by 560,000 barrels per day, an oil ministry spokesman said on Monday, as the top oil exporter makes good on its pledge to help rein in a global supply glut.

 

The cut, from customer requests for Saudi crude, is in line with the kingdom's commitment to an OPEC-led supply reduction under which Riyadh is required to slash 486,000 bpd.

 

"Despite very strong demand from international waterborne customers at more than 7.711 million bpd, they were allocated only 7.150 million bpd," the spokesman said in a statement.

 

"Saudi Arabia is once again demonstrating extraordinary leadership in its commitment to rebalancing the market, as we approach the upcoming key meeting of November 30 in Vienna."

 

The kingdom is "restraining not only the top-line of production volume but even more importantly the bottom line of exports, which are what ultimately shape global inventories and market balances," the spokesman added.

 

OPEC along with Russia and other non-member oil producers agreed to cut output by around 1.8 million bpd from Jan. 1 this year until March 2018. OPEC meets next in Vienna on Nov. 30 to decide on its output policy and OPEC officials have said the supply-cutting pact is likely to be extended beyond March.

 

Saudi Arabia has been slashing shipments in recent months, particularly to the United States, in an attempt to drain global oil stocks.

 

The kingdom curtailed its oil exports in September to below 6.7 million bpd, "despite high customer demand and the partial reduction of domestic summer crude burning requirements", the spokesman said.

 

Bringing global oil inventories down to their five-year average is a key marker for the Organization of the Petroleum Exporting Countries in measuring the success of the supply reduction.

 

"The kingdom expects all other participants in the (agreement) to follow suit and to maintain the high levels of overall conformity achieved in August going forward," the spokesman said.

 

OPEC and other producing countries delivered 116 percent of their pledged output cuts in August.