Saudi Arabia to cut oil exports in April

Saudi Arabia’s reduction in crude oil exports comes as part of output cuts by OPEC to support prices and rebalance the market. Getty Images. (Getty Images)
Updated 12 March 2019
0

Saudi Arabia to cut oil exports in April

  • State-owned Saudi Aramco’s oil allocations for April are 635,000 bpd below customers’ nominations, which are the requests made by refiners and clients for Saudi crude
  • Oil prices have been supported this year by output cuts by the Organization of the Petroleum Exporting Countries and its allies

DUBAI: Saudi Arabia plans to cut its crude oil exports in April to below 7 million barrels per day (bpd), while keeping its output well below 10 million bpd, a Saudi official said on Monday, as the Kingdom seeks to drain a supply glut and support oil prices.
State-owned Saudi Aramco’s oil allocations for April are 635,000 bpd below customers’ nominations, which are the requests made by refiners and clients for Saudi crude, the official said.
“Despite very strong demand from international waterborne customers at more than 7.6 million bpd, customers were allocated less than 7 million bpd,” the official said, adding that Saudi exports in March would also be below 7 million bpd.
Oil prices have been supported this year by output cuts by the Organization of the Petroleum Exporting Countries and its allies. US sanctions on the oil industries of OPEC members Iran and Venezuela have also tightened supplies.
Benchmark Brent climbed above $66 a barrel on Monday, helped by comments by Saudi Oil Minister Khalid Al-Falih that an end to OPEC-led supply cuts was unlikely before June and a report showed a fall in US drilling activity.
April allocations by Aramco show “a deep cut of 635,000 bpd from customer requests for its crude oil,” the Saudi official said.
“This will keep production well below 10 million bpd in April,” the official said, adding that this was also below the 10.311 million bpd that the Kingdom had agreed as its production target under the OPEC-led deal on cutting supplies.
OPEC, Russia and other producers, known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from Jan. 1 for six months.
“Saudi Arabia is demonstrating extraordinary commitment to accelerating market rebalancing,” the official said, adding that the Kingdom expected other OPEC+ countries to show similar levels of contributions and high conformity to agreed cuts.
The Saudi energy minister said on Sunday that March oil output was 9.8 million bpd and the country — OPEC’s biggest producer — planned to keep its April output at the same level.
Saudi Arabia’s oil production in February fell to 10.136 million bpd, a Saudi industry source said on Friday, down from 10.24 million bpd in January.
Saudi crude exports to the US market have slowed in past weeks, according to the International Energy Agency, while Asia’s crude demand is set to drop in the second quarter due to seasonal refinery maintenance which would limit supply.


Mahathir: Some Malaysian state-owned entities may be listed

Some analysts have speculated the Malaysian government could list a small portion of its stake in state energy firm Petronas to generate revenue. (Reuters)
Updated 12 min 25 sec ago
0

Mahathir: Some Malaysian state-owned entities may be listed

  • Malaysia is saddled with debt and liabilities of more than 1 trillion ringgit ($245.52 billion)
  • A government panel to cut debt is looking at strategies
KUALA LUMPUR: Malaysia may list certain state-owned entities to cut government debt and liabilities, Prime Minister Mahathir Mohamad said on Tuesday as it seeks new revenue sources to boost its fiscal position.
Mahathir, elected in a stunning upset last year, has blamed the previous administration of Najib Razak for saddling Malaysia with debt and liabilities of more than 1 trillion ringgit ($245.52 billion).
A government panel to cut debt is looking at strategies, such as “identification of opportunities on potential asset monetization, which means mature unlisted government entities may be listed in the stock market,” he said.
State-linked companies could also pare equity stakes, he told a conference of investors in Kuala Lumpur.
“The key guiding principles for monetising any of our assets is that the disposal or monetization must never be done at fire-sale prices, and any disposal of shares, monetization of assets, auctions or other measures will be done in an orderly manner.”
He did not identify specific companies or fix a timeframe for the plan, however.
Sovereign wealth fund Khazanah Nasional announced a new strategy this month, saying it was gearing up to be a “long-term real return provider” to the government through its commercial investments.
Last month Reuters reported, citing sources, that Khazanah’s new strategy aimed at delivering more cash to the government by pruning stakes in non-strategic assets.
Some analysts have also speculated the government could list a small portion of its stake in state energy firm Petronas to generate revenue.
Petronas is the sole manager of Malaysia’s oil and gas reserves. Although some of its subsidiaries are listed on the national stock exchange, Petronas is fully owned by the government.
Finance Minister Lim Guan Eng said last year the government had no immediate plans to sell stakes in state-owned companies, but did not rule out the possibility in the future.
Lim and Mahathir have blamed corruption scandals in the previous administration for Malaysia’s large debts. The fiscal situation was also hurt after the new government scrapped an unpopular consumption tax, in line with a campaign promise.
Former premier Najib has been slapped with dozens of corruption charges since his defeat in May 2018, many related to alleged money laundering at state fund 1MDB.
He has pleaded not guilty and has consistently denied any wrongdoing.