How Deep Will Saudi Cut Its Oil Output? To the Lowest Since 2015
(Bloomberg) -- Saudi Arabia has promised to do “ whatever it takes” to end the global oil gut. If it cuts supplies in November by as much as it pledges, the kingdom will reduce production and exports alike by more or less a million barrels a day compared with last year.
And that’s about all the world’s biggest oil exporter -- and linchpin of a global plan to bolster crude markets -- can do to prop up prices: pump and sell less of the stuff.
State-run Saudi Aramco plans to pump about 9.77 million barrels a day next month, in what would be its smallest output since January 2015. That’s about one million barrels a day less than the 10.72 million it pumped in November 2016. The Saudis disclosed their production plans on Monday when the energy ministry announced that Aramco will supply buyers with less oil than they asked for in November. Much less.
The country’s customers told the state oil company, known formally as Saudi Arabian Oil Co., that they wanted more than 7.7 million barrels of crude a day. The producer told them they could only have 7.15 million barrels a day.
Sure, that’s more than the 6.68 million barrels that Bloomberg tanker tracking data show the Saudis to have exported in September. But Saudi Arabia exported more than 8 million barrels in November 2016, and shipments usually drop during the summer months as the desert kingdom uses more of its own oil to keep power plants and air conditioners running at full tilt. What’s more, this summer coincided with Saudi Energy Minister Khalid Al-Falih’s efforts to curtail sales and drain global crude stockpiles.
Customers will have to look elsewhere for the 560,000 barrels of crude a day that they asked for but won’t be getting from the Saudis. They could ask fellow OPEC members Ecuador or Qatar, but buyers would need pretty much all the oil that either country produces -- if it were even available -- to make up for the shortfall in Saudi sales.
The Saudis, who said they expect other participants in the output-cuts agreement to follow their “extraordinary leadership,” must be hoping that their partners in the deal don’t oblige, and steal, the kingdom’s customers.
To contact the reporter on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net. To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net Bruce Stanley.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- Libya's Surprise Oil Minister Change Throws Spotlight on Output
- Oil Seals Quarterly Gain in Tightening Market
- Oman Sees Increasing Ship-to-Ship Transfers of Russian Oil Bound for India
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- UK Oil Regulator Publishes New Emissions Reduction Plan
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- PetroChina Posts Higher Annual Profit on Higher Production
- McDermott Settles Reficar Dispute
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil Demand Outpaces Expectations, Testing Calculus on Peak Crude
- House Passes Protecting American Energy Production Act
- TotalEnergies Restarts Production in Denmark's Biggest Gas Field
- USA Oil and Gas Job Figures Jump
- Republican Lawmakers Say IEA Has Abandoned Energy Security Mission
- Blockchain Demands Attention in Oil and Gas
- Houthis Warn Saudi Arabia of Retaliation If It Backs USA Attacks
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Summer Pump Prices Set to Hit $4 a Gallon Just as Americans Hit the Road
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Equinor Makes Discovery in North Sea
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension