Saudi Arabia is mulling a unilateral 1 million barrel a day cut to exports in an attempt to rebalance the oil market and offset the rise in Libyan and Nigerian supplies, Petroleum Policy Intelligence said in a report.
“The possible Saudi cut is a response to the second measure under discussion – Russia’s demand that supply caps be introduced for Libya and Nigeria, whose growth during the first half of the year has undermined the impact of the cuts,” according to the report.
A third option under consideration was the producers’ agreement on maintaining stricter compliance with existing production targets as many countries have not yet cut the full amount agreed.
Saudi Arabia has led OPEC’s efforts – in alliance with other big producers like Russia – to draw down high inventories and boost the price of crude. Since the cuts were first implemented on January 1, Brent crude slumped by about 13 percent, hurt by Nigeria and Libya– two OPEC members who were exempt from the cuts due to long-running disruptions in their countries.
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