The Saudi Arabian government has outlined plans to reduce the domestic crude oil production to approximately 9.8 mb/d in March 2019, which is over 0.5 mb/d below its pledged production level of 10.3 mb/d agreed under the latest global supply cutting agreement between OPEC and non-OPEC producers. Besides, Saudi oil exports are slated to follow the same trend and will decrease to 6.9 mb/d.
The latest agreement between OPEC and non-OPEC oil producers was reached in December 2018. The parties agreed to jointly reduce crude oil production by 1.2 mb/d, effective as of January 2019 for an initial period of six months, in an attempt to strengthen global oil prices. The cuts are shared among OPEC countries (0.8 mb/d) and non-OPEC countries such as Russia (0.4 mb/d). In January 2019, the OPEC managed to cut 797,000 bbl/d by holding back supply, a figure slightly below its target of 812,000 bbl/d. The largest cuts came from Saudi Arabia as the kingdom produced only 10.2 mb/d in January 2019, down by 350,000 bbl/d from the previous month and about 100,000 bbl/d below its official quota of 10.3 mb/d under the production cutting agreement. The country is voluntarily pursuing a strategy of going beyond its commitment to lower both its production and exports of crude oil.
Meanwhile, the US domestic oil production is offsetting these cuts and is reaching all-time highs as it hit the 11.9 mb/d milestone in December 2018. The US Energy Information Administration (EIA) predicts that the figure could reach 12 mb/d later in 2019 and even 12.9 mb/d in 2020.