Saudi Arabia affirmed its commitment to the new
production quota agreed by OPEC
Saudi oil official yesterday affirmed the Kingdom’s commitment to
the new production quota agreed by the Organization of Petroleum
Exporting Countries to shore up prices. The new cuts in production,
which will remove one million barrels a day from the market, come into
The official, who requested anonymity, told Arab News that the
decision to lower OPEC output from 24.2 million bpd to 23.2 million
bpd came at the right time. "The world depression and instability in
demand levels necessitate controlling of oil supply in the
international markets to protect the product from negative market
effects.” The official warned OPEC members against exceeding
production quotas, and added that such excess production — estimated
at more than 500,000 bpd — will have a negative impact on prices.
“It will also weaken the unanimous decisions taken by the
organization,” he added.
The Saudi official refused to speculate about new proposals to be
presented by the Kingdom at OPEC’s next meeting, scheduled for Sept.
26. The new production cuts will reduce the Kingdom’s oil supply to
international companies by six to seven percent compared to August
sales. Saudi Arabia’s oil supply to Japan and South Korea, on the
other hand, will be cut by 19 percent against original contracts due
to a 11 percent cut in supplies slapped by Riyadh on the two East
Asian countries during August 2001. The supplies to European countries
will be 30 to 35 percent less than the quantities previously agreed.