Saudi Arabia’s crude oil exports to the United States fell to a 30-year low in October, Bloomberg reported on Tuesday.
Since July, Saudi state-run oil company Aramco has cut down on supply in an effort to drain the storage tanks in refineries across the United States, which it hopes will lift oil prices. According to data, the US bought just 525,000 barrels a day of Saudi crude in October, the lowest since May 1987 and down from 1.5 million barrels a day a decade ago.
The cut in exports is part of the strategy the Organization of Petroleum Exporting Countries adopted in 2016 to fight a worldwide oil glut, which caused prices to fall. The organisation and non-member nations, including Russia, had then decided to reduce global output of oil by 1.8 million barrels a day. These countries are scheduled to meet later this month to discuss keeping on with the cuts through 2018.
Meanwhile, Iraq is filling in to meet the United States’ oil demand, Reuters reported. The country’s crude imports from Iraq increased 41% over the past year. In October, Iraqi shipments to the nation’s largest refinery in Port Arthur in Texas overtook Saudi Arabia’s for the first time in over 30 years.
The decline of Saudi crude exports to the United States is, however, set to speed up. The Saudi Arabian Energy Ministry told Reuters last week that crude exports to the US in December will be more than 10% lower than the amount of oil exported in November.
“For every barrel [the Saudis] do not produce, they are losing market share,” Sandy Fielden, the director of research, commodities and energy at investment research firm Morningstar, was quoted as saying by Reuters.