Saudi Arabia will reduce oil exports to oil regions as a further measure to end the global oil supply glut to boost barrel prices worldwide, according to a new report by Bloomberg.
In total, the Kingdom plans to reduce outbound shipments by 120,000 barrels per day in volume in December, the Energy Ministry said.
American buyers will receive a further 10 percent cut next month. The news comes after the U.S. Energy Information Administration announced record weeks for imports and production last period. The agency's figures show that the U.S. imported 506,000 bpd in October, but imports from the Kingdom to the US for week ending November 3 climbed to 816,000 bpd.
OPEC-led by Saudi Arabia-and Russia have orchestrated an international agreement to lower output and eliminate the 2 million bpd of extra production that caused the steep drop in oil prices back in 2014.
So far, oil prices have inched back up to $60 a Brent barrel since the beginning of the year, but the glut has only been half eliminated. A further reduction in excess oil could bring prices up to $70, Saudi hopes, ahead of its Aramco initial public offering which is scheduled for next year.
Related: The Kurdish Oil Gamble Has Backfired
Saudi Crown Prince Mohammad bin Salman's unexpected crackdown on corruption shattered the tranquility of the Kingdom over the past weekend. After Saturday's news emerged that a long list of high-profile Saudi royals, military leaders, and multi-billionaires were arrested or confined to their quarters, all seemed to be only an implementation of the crown prince's open threat that "no-one is above the law, whether it is a prince or a minister."
It seems the crown prince is far from finished, as news has emerged that one of the Arab world's leading broadcasters, MBC, has been put under government control. Part of its management was removed and the owner detained. News is also emerging that even the former Saudi Minister of Oil Ali Al Naimi, Saudi Arabia's media face for decades, has been forcibly confined to his quarters.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More