Saudi Aramco mulls oil supply cuts of 3-7% in Feb to meet OPEC target

Saudi Aramco has started talks with customers globally to discuss possible cuts of 3 per cent to 7 per cent in February crude loadings to comply with OPEC production cuts, four sources with knowledge of the matter said on Thursday.

The Organization of the Petroleum Exporting Countries (OPEC) agreed in late November to cut production in the first half of 2017 to reduce global oversupply and prop up prices.

Under the deal, Saudi Arabia, the world’s biggest oil exporter, agreed to cut output by 486,000 barrels per day (bpd), or 4.61 per cent of its October output of 10.544 million bpd.

“Aramco is approaching all its customers for possible cuts from February and discussing likely (supply) scenarios,” one of the sources said.

“Nothing is confirmed yet,” he said, adding that the scenarios were for 3 per cent to 7 per cent cuts.

State oil giant Saudi Aramco will be receiving nominations for February crude supplies from its customers and is assessing which grades it could cut, a second source said.

Saudi oil buyers will be notified by Jan. 10 of their respective crude allocations for February.