Saudi Arabia will cut its crude oil exports to Asia by more than 100,000 bpd in January compared to December, while keeping its shipments to Europe and the U.S. at the December levels, the Saudi Energy Ministry said on Monday.
“Aramco will maintain its overall supply levels next month at their recent low levels,” the ministry said in a statement, as carried by Reuters.
“We hope that by leading by example, our partners from OPEC and non-OPEC will do the same in order to keep conformity levels above 100 percent and accelerate the rebalancing of the market,” an energy ministry spokesman said in the statement.
Saudi Arabia’s overall global crude oil shipments will be kept at 6.9 million bpd in January, an industry source familiar with the Saudi plans told Reuters on Monday.
For December, the Saudis had cut total crude oil exports by 120,000 bpd from just above 7 million bpd in November, cutting shipments to all regions, including a 10-percent reduction of oil exports to the U.S.
Saudi Arabia’s shipments to the U.S. have been just over 700,000 bpd in each of the past four weeks, according to data by the EIA. In May this year, the Saudis started to purposefully cut exports to the most transparent market for oil inventory reporting, to force a reduction of inventories.
For January, Saudi Aramco will supply full contractual volumes to five North Asian refiners, according to five sources who spoke to Reuters.
While the Saudis are cutting volumes to Asia, they are also raising the official selling prices (OSPs) to the region for January, on the back of a stronger Dubai benchmark and solid demand, generally in line with traders’ expectations.
OPEC’s largest producer and exporter has lifted the price of its flagship Arab Light crude grade for Asian buyers by $0.40 a barrel for January compared to December, to a premium of $1.65 per barrel over the Dubai/Oman benchmark against which the Saudis price their oil to Asia.
By Tsvetana Paraskova for Oilprice.com
