The world’s top crude-oil exporter, Saudi Arabia, is planning to pull back from record-high levels of production at the end of the summer when domestic energy demand subsides, according to people with knowledge of the matter.
The reduction could begin as soon as September and would amount to about 200,000 to 300,000 barrels a day, bringing production to about 10.3 million barrels a day, the people said. Saudi Arabia told the Organization of the Petroleum Exporting Countries that it produced 10.56 million barrels a day in June, a record high.
“It is purely based on the [domestic] demand situation,” one of the people said, adding that “production is likely to hover around” 10 million barrels until the end of the year.It's not a huge cut (250,000 bopd) but a) the headline; and, b) remember, Saudi Arabia has two new refineries, requiring about 800,000 bopd (together). For my purposes, I round that to one million bopd.
Compare the statement: "... production is likely to hover around" 10 million bopd, with the graph at this link and then recall that the Saudis announced a $35-billion, 5-program back in 2012 to increase oil production, and all it got them in the most recent reporting period was a 1% increase month-over-month.
But most interesting is what was not said: "production is likely to hove around 10 million bbls until the end of the year" ... and then what?
If Saudi cuts back, who's gonna fill their shoes?