Saudi Arabia Cuts Oil Supply after OPEC+ alliance Deal

Saudi Aramco said it would market 8.5 million bpd of crude from May. This is under an agreement by the OPEC+ alliance of major producers.

OPEC+ agreed Sunday to slash daily production by 9.7 million bpd over the next two months. This is to boost plummeting prices and shore up the energy market amid the coronavirus outbreak.

In a brief statement on the website of the Saudi bourse; Saudi Aramco also said Friday it would make available 8.5 million bpd.

That includes oil supply to Aramco’s domestic customers inside the country and exports abroad.

According to the deal; Saudi Arabia and Russia will cut 2.5 million bpd each from their October 2018 production levels of 11 million bpd.

Saudi Aramco allocated around 4 million bpd of crude oil to its Asian customers; which is lower than its full contractual volumes to Asia by about 2 million bpd, a Saudi oil source familiar with the company’s plans told Reuters on Friday.

“The full contractual volumes to Asia are about 6 million bpd. What Aramco allocated is what was nominated; ~4 million bpd,” the Saudi source said that on condition of anonymity.

Saudi energy minister Prince Abdulaziz bin Salman said that the Kingdom could cut oil output below its current quota of 8.5 million bpd if there was a need by the market over the coming months and in case of any collective reductions with other producers on a pro-rata basis.

He also said oil purchases into reserves (SPRs) of countries were at 200 million barrels over the next couple of months.

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