Muscat: Oman will cut crude oil exports to Asia by 15 per cent to meet local demand, the Ministry of Oil and Gas said.The supply cuts are expected to begin from June this year and will partly account for the 45,000 barrels per day promised to be slashed by Oman as a part of production cut agreement with OPEC members.
The supply cut is to meet rising demand at the state owned Sohar Refinery,” an official from the Ministry of Oil and Gas confirmed with Times of Oman.Major recipientChina is the major recipient of Omani crude with around 90 per cent crude exports from the Sultanate reaching Chinese ports and is likely to be the most affected by this; however, no official statement has been made regarding buyers or countries that will be affected due to this.Oman’s rising domestic demand comes from a surge of petroleum industries including the multibillion dollar Sohar Refinery Improvement Project that is ready to boost refined product output by 4.2 million tonnes a year to 13 million tonnes a year.The improvement project by Orpic is likely to increase the manufacturing share of the gross domestic product as it will reduce naphtha purchases and produce bitumen, mainly used to manufacture asphalt, to cater to growing infrastructure projects in the country."I believe it is a good decision from the Ministry of Oil and Gas to provide necessary input to local industries.
We expect 100 per cent conformity.”“This will be vital to help counter the market developments I have just highlighted, and the increasing volatility we have witnessed over the past couple of weeks.
We still believe that the full and timely implementation of the decisions taken last year will see destocking accelerate by the end of the first half of 2017 with positive upshots and anticipated balanced market towards the end of the year,” Mohammed Sanuski Barkindo, General Secretary of OPEC said in his opening remark of the meeting.However, rising shale production in the US has cast shadow over the production adjustments extending until the end of the year.
The deal has witnessed an unprecedented compliance rate of 94 per cent in February according to OPEC, an eight per cent point increase from January.