The de facto leader of the Organisation of Petroleum Exporting Countries (OPEC) plans to pump less than 10 million barrels a day of crude in both July and August.
Saudi Arabia is fulfilling its pledge to make deeper cuts in oil output than the OPEC+ agreement on output requires, according to the first indication of the kingdom’s production since the supplier group extended curbs earlier this month, reported Bloomberg.
The Kingdom will limit exports to less than seven million barrels a day, following OPEC and partners including Russia’s agreement to keep cutting production through the end of March.
The alliance is seeking to mop up excess crude in the market and buoy prices.
Even as Saudi Energy Minister Khalid Al-Falih pledged that his country would continue doing more than its share to pare global supply, Middle Eastern oil producers are keeping Asia, their biggest regional market, well supplied.
Saudi Aramco will supply full contractual amounts of crude to at least six buyers in Asia for August, in line with sales to that region in June and July.
Edward Bell, Director of Commodity Research at Emirates NBD, said that Arabian Gulf producers are maintaining shipments to buyers that may be lacking crude from Iran.
The Saudis need to make sure Asia stays well supplied, while taking away crude from regions that do not need it as much, while the Kingdom supplies to the US may remain constrained for the rest of the year, added Bell.
In a monthly report, OPEC stated that global oil consumption will continue to grow in 2020 at the same pace as this year, with the expansion driven by emerging economies such as India and China.