Saudi Arabia to restrain oil exports in March, confident cuts will stabilize market

Saudi Energy Minister Khalid Al-Falih and Russian Energy Minister Alexander Novak attend a news conference at the Ritz-Carlton hotel in Riyadh, Saudi Arabia. (Reuters)
Updated 14 February 2018
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Saudi Arabia to restrain oil exports in March, confident cuts will stabilize market

LONDON: Saudi Arabia will restrain its oil exports in March despite lower domestic need for crude as the Kingdom pushes to eliminate fully the global oil glut and combat worries about a new cycle of oil price weakness.
Saudi Arabia will keep its crude exports below 7 million barrels per day (bpd) in March, despite a maintenance shutdown of the 400,000 bpd SAMREF refinery, the Saudi energy ministry said, confirming a plan given earlier by industry sources.
“Saudi Arabia remains focused on working down excess oil inventories,” a ministry spokesman said in a statement.
“Market volatility is a common concern for producers and consumers, and the Kingdom is committed to mitigating this volatility and moderating its negative impacts by responsibly meeting its pledges” under an OPEC-led supply cut deal.
OPEC and outside producers including Russia are reducing output to get rid of a supply glut. The pact began a year ago and has been extended until the end of 2018.
The cut has boosted oil prices, which in January topped $71 a barrel for the first time since 2014. But crude has since slid and hit a 2018 low of $61.76 this week, pressured by rising US output and forecasts oversupply may persist.
Saudi Arabia’s Energy Minister Khalid Al-Falih sounded an upbeat note even after the price drop, saying on Wednesday he was sure cooperation between OPEC and its non-OPEC allies will continue to stabilize the market.
“I am confident that our high degree of cooperation and coordination will continue and bring the desired results,” Falih told an industry conference attended by Russian Energy Minister Alexander Novak and OPEC Secretary General Mohammad Barkindo.
“Market volatility is unfortunate but ultimately it is the fundamentals that I watch.”
Barkindo said oil demand would grow this year at healthy levels and data pointed to continued high compliance by producers in January with their pledges under the supply-cut deal.
OPEC has delivered more than 100 percent of the output cuts that members pledged under the deal, according to figures from OPEC and other analysts, helped in part by an involuntary drop in Venezuela, where output is falling amid an economic crisis.
The Saudi energy ministry also said production by state oil company Aramco in March will be 100,000 bpd below February’s level, suggesting Saudi Arabia will continue to pump less than its OPEC target.
Novak met with Saudi King Salman at his palace in Riyadh on Wednesday and the two discussed producers’ efforts to rebalance the market and decrease surplus inventories, SPA reported.
Novak had said on Tuesday oil inventories had been declining despite the rise in US production.  


US hits Chinese and Russian firms over breach of N.Korea sanctions

Updated 55 min 46 sec ago
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US hits Chinese and Russian firms over breach of N.Korea sanctions

  • Hit were the China-based Dalian Sun Moon Star International Logistics Trading Co. Ltd. and Russian-based Profinet Pte Ltd.
  • The US Treasury said the offending agencies netted more than $1 billion a year by exporting alcohol and cigarette products to North Korea
WASHINGTON: The United States on imposed sanctions on a Russian port service agency and Chinese firms on Wednesday for aiding North Korean ships and selling alcohol and tobacco to Pyongyang in breach of US sanctions aimed at pressuring North Korea to end its nuclear programs.
The US Treasury said in a statement China-based Dalian Sun Moon Star International Logistics Trading Co. Ltd. and its Singapore-based affiliate SINSMS Pte. Ltd. had netted more than $1 billion a year by exporting alcohol and cigarette products to North Korea.
The department also sanctioned Russian-based Profinet Pte Ltd. and its director general, Vasili Aleksandrovich Kolchanov, for providing port services on at least six occasions to North Korean-flagged ships.
Kolchanov was personally involved in North Korea-related deals and interacted directly with North Korean representatives in Russia, the Treasury department said.
“The tactics that these entities based in China, Singapore, and Russia are using to attempt to evade sanctions are prohibited under US law, and all facets of the shipping industry have a responsibility to abide by them or expose themselves to serious risks,” US Treasury Secretary Steven Mnuchin said in a statement.
Washington has been pressuring North Korea to give up its nuclear weapons program.
Gao Ye, legal representative of Dalian Sun Moon Star International Logistics Trading, said when asked for comment on the US Treasury statement the matter was still unclear and the Chinese company had not received any notice.