Saudi Arabia plans to keep oil exports below 7 MMbpd next month as the OPEC country allocates less crude than demanded by customers to help stabilize the market, according to Saudi officials.
State-run Saudi Arabian Oil Co., known as Aramco, will make a cut of 700,000 bpd in its allocations to customers in all regions next month, the officials said, asking not to be identified because the matter isn’t public.
The country’s production will be lower in September than this month, they said.
The cut in the allocations to customers comes despite strong demand for oil in all regions, the officials said.
The kingdom could have produced about 10.3 MMbpd because demand is much higher, but decided to keep output and exports suppressed and reduce customer requests by 700,000 bpd, they said.
The Saudis and their partners in the OPEC+ coalition are determined to do what they can for market stability, they said.
Saudi Arabia, the world’s largest oil exporter, has already cut production more than required under an agreement between the Organization of Petroleum Exporting Countries and allies outside of the group to help drain inventories and reach market stability.
Oil has been swept up in a global market meltdown as the U.S.-China trade dispute worsened, spurring fears it would morph into a currency war.
Prices recovered some of their losses on Thursday after a Saudi official, speaking anonymously, said the kingdom won’t tolerate a further sell-off and has phoned other producers to discuss a response. But a cooling global economy and the U.S-China trade dispute are putting a brake on fuel demand, so even if global producers decide to cut output further, they may struggle to revive prices.