Saudi Arabia to export oil to US Reduce Influence the oil market and drive up prices. The country will cut total oil production by 10%, marking its lowest output since 2011. Reducing exports to the US is strategic because data on US oil imports is released weekly, while in other regions it is released monthly or not at all.
Although the US is less dependent on Saudi oil than it once was, Saudi Arabia hopes the move will boost prices. Excess oil from Russia, Iran and Venezuela is outstripping demand, making it difficult for prices to stay above $70 a barrel. By targeting the U.S. and European markets, where sanctions prevent a shift to alternative supplies from Russia and Iran, Saudi Arabia hopes to boost demand.
After production cuts, most exports will go to Asia. However, Saudi Arabia could face problems if prices rise relative to other crudes, as U.S. refiners may buy less Saudi oil. To avoid this, Saudi Arabia pushed the premium on its oil exports to record highs, pricing it out of the market. In addition, Saudi Arabia controls the largest refinery in the United States, giving it additional leverage over supply.
These measures are expected to significantly reduce Saudi oil exports to the US in the coming months. However, the exact effect of this production cut is still unknown, as the Saudi Ministry of Energy has not released specific details.
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