Saudi Aramco cut oil production by 8.5 million barrels
Saudi Aramco cut oil production by 8.5 million barrels

A Saudi official revealed to Al-Mukhtasar News earlier today that Saudi Aramco started cutting oil production earlier this week, before reducing the OPEC Plus production agreed at the beginning of next May, as it would begin a trip to cut from 12 million barrels.

In a related context, it has been reported that Saudi Aramco, the Saudi oil giant, has begun to reduce production from about 12 million barrels per day to achieve the agreed level of 8.5 million barrels per day.

With the start of the reduction process before next May, Saudi Arabia will join Kuwait, Algeria and Nigeria, members of the Organization of Petroleum Exporting Countries (OPEC), to start cutting crude production earlier in the week.

The meeting, within the framework of OPEC Plus, was the last, which reduced global production by 9.7 million barrels per day, or about 10%, in an attempt to balance the volatile market due to the Corona virus crisis, and to reduce oil exports to global markets.

For its part, Saudi Aramco revealed on April 18 this year to reduce its exports from the beginning of next month, to provide its customers with a total of 8.5 million barrels per day, including crude oil supplied to local and international customers, but the global oil conditions called on the markets to take immediate action before entering New month.

According to the agreement, the Kingdom of Saudi Arabia, the largest producer in OPEC, and Russia, the largest producer outside the organization, will reduce production by 2.5 million barrels each, compared to 11 million barrels as a basic limit for the two countries.

The Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, agreed to cut production by 9.7 million barrels per day in May and June, after oil prices reached their lowest levels in 18 years, as the cut aimed to reduce the oversupply that was exacerbated by the collapse in demand The world over oil after the outbreak of the Corona virus.

In this context, a Saudi oil source familiar with Saudi Aramco's plans spoke, that the company has allocated about 4 million barrels per day of crude oil to its Asian clients, which is less than the full contractual quantities for Asia by about two million barrels per day, and allocating contractual quantities to Asia about 6 million barrels per day.

The Saudi Energy Minister Prince Abdulaziz bin Salman revealed in previous statements that the true size of the reduction will be much greater than what was announced (about 9.7 million barrels per day), noting that only OPEC Plus production will decrease by 12.5 million barrels per day. Today, the purchases of strategic oil reserves of countries are expected to reach about 200 million barrels in May and June.