US, Russia could be set to benefit with Saudi Arabia reportedly cutting oil supplies to Asia

by Dramelin 9:30 AM 0 comments

State oil company Saudi Aramco will cut crude oil allocations to its customers worldwide in September by at least 520,000 barrels per day (bpd), an industry source familiar with the matter told Reuters on Tuesday.
The cuts in allocations are in line with Saudi Arabia`s commitments with the OPEC-led supply reduction pact, under which the top oil exporter is required to cut 486,000 bpd.
Saudi Arabia will cut supplies to most buyers in Asia by up to 10 percent in September, multiple sources with knowledge of the matter have said.
"The Saudi decision to take an ax to its Asian crude allocations shows it means business (and) gives credence to its pledge to do `whatever it takes` to normalize bulging global oil inventories," PVM oil analyst, Stephen Brennock, told CNBC on Tuesday.
Brennock argued Asian buyers would soon be forced to become increasingly reliant on producers in the Atlantic Basin in order to meet their crude oil requirements.
He also suggested that Russia would most likely gain further market share from Saudi Arabia as a result of the Middle Eastern country`s self-imposed cut to crude oil allocations.
"(While) it helps to lift sentiment in the short term, there`s no guarantee of long-term price support as other oil exporters including Russia, the U.
and Iran rush to fill the shortfall," Brennock said.
Benchmark Brent crude was trading marginally higher at $52.
35 a barrel at 2.
London time, while U.
light crude was up 0.