Saudi Arabia will not reduce its crude oil exports to Japan despite the OPEC production cut agreement, a deputy minister at the oil ministry told media. The Kingdom supplies the largest part of Japan's crude imports at a daily rate of 1.13 million bpd as of 2015.
Mineral resources-poor Japan is heavily dependent on oil imports, and this makes it a key market for all the large international players. It is particularly important for Saudi Arabia, which last year lost the top spot in the list of importers in China to Russia, and has also agreed to shoulder the biggest portion of the cut as befits its position as the biggest producer.
The total output to be taken off the market from OPEC and 11 non-OPEC producers is 1.8 million bpd, and most of this, 1.5 million bpd, has already been cut, according to a recent statement from the cutters' camp.
Earlier this week, Reuters reported that Saudi Arabia's output had fallen below the December average daily of 10.47 million barrels, to 9.9 million bpd, with exports also declining. Earlier in the month, Oil Minister Khalid al-Falih said the Kingdom was willing to go above and beyond its assigned quota to demonstrate its commitment to the agreement and the efforts to improve international oil prices. The 9.9-million-barrel figure means it has indeed cut more than the agreed 485,000 bpd, according to energy industry sources and shipping data, seen by Reuters. Related: Russia Makes A Move On Asian Oil Markets As OPEC Cuts
Saudi Arabia is doing everything in its power to quench worries that some OPEC members and other agreement signatories may cheat and produce more than agreed, because these doubts are weighing on oil prices, keeping them within the US$50-55 a barrel range.
The Kingdom is not alone in its efforts: last Sunday, the oil ministers of Saudi Arabia, Russia, Venezuela, Algeria, Oman, and Qatar met in Vienna to discuss the setting up of a committee to monitor compliance with the deal.
By Irina Slav for Oilprice.com
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