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Saudi Arabia’s crude oil exports continued to fall at the start of this year after OPEC’s largest producer started to aggressively cut oil supply in December last year to prevent another glut, while the Kingdom signals that further cuts are coming.
According to data by the Joint Organisations Data Initiative (JODI) database, which collects self-reported figures from 114 countries, Saudi crude oil exports dropped to 7.254 million bpd in January, down from 7.687 million bpd in December 2018.
During the last month of 2018, OPEC’s de facto leader and the cartel’s key ally Russia realized their preemptive production ramp-up to meet a steep Iranian export shortfall would create another glut if they don’t implement another round of cuts, which they did, starting in January.
Saudi Arabia’s crude oil exports plunged by nearly 550,000 bpd to 7.687 million bpd in December, down from a two-year high in November, as the Kingdom started to limit supply after the U.S. granted waivers to eight Iranian customers and the market swung into oversupply.
In November, Saudi Arabia’s crude oil exports had jumped by 534,000 bpd month on month to 8.24 million bpd—the highest level in two years after the Saudis boosted supply to the market to offset supply losses from Iran with the return of the U.S. sanctions on Tehran’s oil industry.
Related: Oil Rises As OPEC Holds Off On Production Cuts Decision
Last week, Saudi Arabia signaled that it is determined to do ‘whatever it takes’ to rebalance the market and support oil prices by keeping its April crude oil exports at below 7 million bpd, despite requests for more than 7.6 million bpd of Saudi oil from its customers. The lower allocations by Saudi Aramco for April will also mean that the Kingdom’s oil production will be “well below 10 million bpd” in April, a Saudi official told Reuters.
In an interview with the Financial Times in February, Saudi Arabia’s Energy Minister Khalid al-Falih said that the Saudis would cut production to around 9.8 million bpd in March, some 500,000 bpd below the commitment in the OPEC+ deal. Al-Falih also said that Saudi Arabia would be cutting its crude oil exports to near 6.9 million bpd this month, slashed from the November high of 8.2 million bpd.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.