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Saudi Arabia will reduce oil exports in September

The world's largest oil exporter and OPEC's unofficial leader Saudi Arabia will reduce the export of raw materials by at least 520,000 barrels per day in September under the global pact to limit production, sources said on Tuesday.

08.Aug.17 8:02 AM
By Daria Zaytseva


Saudi Arabia will reduce oil exports in September

Riyadh undertook to limit the volume of its own production by 486,000 barrels per day.

Saudi Arabia's export reduction was necessary, given the recent increase in OPEC supplies, which made investors once again question about the effectiveness of the global oil pact.

The market immediately responded to reports of Saudi Arabia's planned reduction in raw materials exports: oil prices went into a plus, now futures for the North Sea standard Brent are stable and traded at $ 52.40 per barrel.

Saudi Arabia's state-owned oil and gas company Saudi Aramco has become accustomed to reducing oil exports to the U.S. and Europe, to a lesser extent - to Asia, in order not to lose market share in the region, which is the main driver of the growth in world energy demand.

Deliveries of oil to China, according to one source, will decrease by 2 million barrels in September, and the other said that in general they will decrease by 5-10 %. At the same time, a major buyer in China assured that he would get all the contracted oil, another said that the supplies would fall by less than 5 %.

Deliveries to South Korea will decrease by more than 2 million barrels in September, to India - by more than 1 million barrels, to Japan - by almost 2 million barrels.

Export to oil companies in Europe is reduced by 220,000 barrels per day. Exports to the U.S. will drop by about 1.1 million barrels for the whole of September.

Light supplies, such as Arab Light and Arab Extra Light, mostly affected the reduction in supplies, sources said, adding that this was due to planned repairs at the Abkaik field.

In addition, Saudi Arabia's decline in exports should support the Middle East oil market, as refineries can switch to spot supplies to compensate for the shortage of raw materials from the kingdom, and arbitrage shipments from the Atlantic Basin are expected to decline.

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