09 Aug Reports suggest Saudi Arabia will cut oil allocations in September
Saudi Arabia is set to siphon off a portion of its crude oil supply to customers worldwide, with reports suggesting state oil firm Saudi Aramco will cut allocations by 520,000 barrels per day (bpd) in September.
The move to further cut crude oil distribution is in line with OPEC’s continued agreement to reduce output amongst members. The top oil exporter is required to cut output by 486,000 bpd under the pact.
Various sources close to the matter also revealed that Saudi Arabia will cut supplies to most buyers in Asia by 10% in September.
Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank, said to CNBC: “Clearly Saudi Arabia is showing everybody that they are willing to be at the forefront of supporting oil prices.
“They are just trying to keep the ball rolling in what is clearly a critical quarter for OPEC.”
The news of the Saudi cut has coincided with a two-day OPEC and non-OPEC meeting in Abu Dhabi, with the issue of compliance with the caps expected to be high on the agenda for the cartel and other leading global oil producers.