Saudi Arabia SLASHES oil exports in desperate bid to rescue crumbling economy
SAUDI Arabia has promised new measures in a desperate bid to drive up worldwide oil prices, as the kingdom becomes increasingly desperate for income.
By LANA CLEMENTS
Express.co.uk
Tue, Jul 25, 2017
The Arab state is slashing its oil exports by hundreds of thousands of barrels a day next month in the hope of creating scarcity that will increase values.
The country is also hoping this will reduce the amount of oil stockpiled in the US.
Brent crude oil prices jumped following the news.
It comes after Saudi Arabia and OPEC (Organization of the Petroleum Exporting Countries) yesterday met in Russia to try to find ways of propping up values of so-called black gold.
At the end of May, the group agreed to cut production but the plan failed to raise demand as US shale producers have filled some of the gaps left by its rivals.
Some members of the group have also failed to stick to quotas.
Saudi Arabia also used much more aggressive tones for states that are not cutting back on oil production going forward.
Fawad Razaqzada, market analyst at Forex.com, said: “Sentiment on the oil market turned positive when Saudi Arabia’s energy minister announced yesterday that his country’s oil exports will be reduced by a good 600 thousand barrels per day in August to 6.6 million bpd.
“This was not only in response to some OPEC nations producing more oil than agreed, but also an attempt to help reduce inventories in the US.”
Saudi Arabia is heavily dependent on oil for income and its economy has been hit since prices crashed from more than $100 a barrel in 2014.
Since then it has tried a number of different approaches to try to raise values, but prices have struggled to rise above $50 a barrel.
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