Saudi Arabia: OPEC and allied countries convinced to cut one million barrels of oil

Saudi Arabia's oil minister states that based on a technical analysis of the oil market during the OPEC and allied countries' monitoring committee meeting, everyone is convinced that there will be an oil surplus next year. Khalid al-Falih said on Monday, November 21, that there is a need to reduce daily oil production by one million barrels by this group. He added that the actual decline in Iranian oil exports due to U.S. sanctions was less than expected. The Saudi oil minister also mentioned that next year, global oil production growth will exceed demand growth. Following the committee meeting on Sunday led by Russia in the UAE, the committee confirmed Mr. Falih's statements about the oil surplus in global markets next year in an analysis published on the official OPEC website, but stated that decisions regarding the oil market should be made at the December meeting of oil ministers. Saudi Arabia claims that its oil needs in global markets have decreased for the next month, and Riyadh intends to reduce its production by half a million barrels in December compared to November. After Saudi statements, oil prices increased by about one percent, marking the largest daily increase in oil prices in the past month. Oil prices had been declining over the past month due to rumors about the U.S. plan to grant exemptions to some oil customers, and this price drop accelerated after November 14 when the U.S. granted exemptions to eight major Iranian oil customers. During this period, oil prices fell by more than 17 percent and are currently below $71. Alexander Novak, the Russian energy minister who attended the UAE meeting, stated that Russia currently does not intend to reduce its oil production, contrary to his Saudi counterpart. After the U.S. withdrawal from the JCPOA, Russia increased its oil production by 300,000 barrels to reach 11.4 million barrels. During this period, Saudi Arabia also increased its daily production by more than 700,000 barrels to 10.7 million barrels. Recently, the oil minister of Oman stated that many OPEC member countries are calling for production cuts. Oman and Russia are non-OPEC members of the monitoring committee for OPEC and allied countries. Currently, the rotating presidency of OPEC is held by Saudi Arabia, and the OPEC secretariat is led by the UAE. According to the International Energy Agency's assessment, global oil production is expected to increase by about 1.8 million barrels next year, while global oil demand growth will only be 1.3 million barrels per day. Meanwhile, the U.S., which has increased its oil production by three million barrels from October 2016 to October this year, continues to increase production rapidly. The Bank of America reported on Monday that the U.S. has become a net energy exporter (including oil, gas, petroleum products, and coal) for the first time in October. The U.S. Energy Information Administration also reported that U.S. crude oil production reached 11.4 million barrels in October, with an average production of 10.9 million barrels for this year. Last year, this figure was 9.4 million barrels and is expected to peak at 12.1 million barrels per day next year.