Saudi Arabia, the world’s largest crude exporter, said it would restrain its oil exports in March, despite a drop in domestic demand for crude oil. The current leader of the Organization of the Petroleum Exporting Countries (OPEC) is pushing for a complete elimination of the global oil supply gap and worries about a new cycle of oil price weakness.
Saudi Arabia will keep its oil exports below 7 million bpd in March, despite the shutdown of the 400,000 bpd refinery, the Saudi Energy Ministry said on Thursday. In a statement issued by the government, Saudi Arabia was reportedly still focused on working to reduce excess oil stocks around the world. The report also added that market volatility is a common concern for producers and consumers, and that the Kingdom of Saudi Arabia is committed to mitigating this volatility and moderating its negative impacts by seriously fulfilling its responsibilities.
The Organization of Petroleum Exporting Countries and external producers, including Russia, are cutting production to get rid of the excess supplies. The agreement began a year ago and was extended until the end of 2018. The decline led to higher oil prices, which in January reached $71 per barrel for the first time since 2014. But since then, oil has fallen in 2018 to $61.76 this week, and pressure of higher US output and excessive supply expectations may continue.
Saudi Energy Minister Khalid al-Falih expressed his optimism even the after prices fell, saying he was confident that cooperation between the Organization of Petroleum Exporting Countries and its non-OPEC allies would help stabilize the markets. “I am confident that our high degree of cooperation and coordination will continue and bring the desired results”, Al-Falih said at an industrial conference attended by Russian Energy Minister Alexander Novak and OPEC Secretary General Mohammad Barkindo.
Mohamed Barkindo said that demand for oil would grow this year, and the data indicated that in January, producers remained strongly committed to their pledges under the supply reduction agreement.
Saudi Aramco will cut production to 100,000 bpd, suggesting that Saudi Arabia will continue to pump below its target.
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