Saudis order crude ‘cuts’ to US, Europe ahead of non-OPEC talks – Russia signals deal still faces challenges
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SINGAPORE/TOKYO/DUBAI, Dec 9, (RTRS): Saudi Arabia has told its US and European customers it will reduce oil deliveries from January as Russia signalled that a commitment from non-OPEC producers to join OPEC’s output limits still faced challenges.
Saudi Arabia told the customers about lower supplies in line with the output reduction agreed by the Organization of the Petroleum Exporting Countries last week, according to a Gulf oil industry source familiar with Saudi oil policy.
OPEC will meet non-OPEC producing countries in Vienna on Dec. 10, hoping non-OPEC will commit to cutting 600,000 barrels per day after its own members agreed to cut 1.2 million bpd last week.
OPEC sources said nine non-OPEC countries were set to join the meeting: Azerbaijan, Kazakhstan, Oman, Mexico, Russia, Sudan, South Sudan, Bahrain and Malaysia.
So far only Russia and Oman have pledged cuts, with one OPEC source saying Mexico could also contribute. In contrast, Kazakhstan plans to boost output in 2017 as it launches the long-delayed Kashagan project.
Russia is expected to shoulder half of the non-OPEC cut, but on Friday Moscow signalled there were snags that needed to be addressed before a deal could be reached.
“Russia sees risks ahead of the deal if questions are not resolved,” a Russian government source told Reuters.
“One hundred percent compliance is critical for the deal … It’s essential for non-OPEC to have a responsible approach towards the deal,” the source said, adding there was also concern about rising OPEC supplies.
Sources at eight refiners in Asia told Reuters they had been notified by state oil giant Saudi Aramco that in January it was set to supply full crude amounts.
Of those eight, three refiners said they would load extra volumes they had requested. The sources declined to be identified as they were not authorised to speak to the media.
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