Saudi Arabia is said to have told its customers across the US and Europe that it will be cutting down on its crude shipments from January.
The world's second largest oil country in terms of proven reserves, has reportedly said that the move was in line with the outcome of the Organization of the Petroleum Exporting Countries (OPEC) meeting last week. During the talks, member countries committed to cutting 1.2 million barrels per day (bpd).
"We told our customers of the allocations and the compliance with allocations (for the cuts) for Saudi Arabia is 100 percent," anonymous Gulf oil industry told Reuters.
The source added that oil sold to Asian refinery customers would mostly stay unaffected. "We are cutting more in the U.S. because the inventories … are very high," the source was quoted as saying by Reuters.
The oil supply cut by Saudi Arabia comes ahead of the meeting between Opec and non-Opec nations, which is scheduled on Saturday in Vienna. The meeting could see non-Opec nations commit to reducing their production by 600,000 bpd.
Nine non-member countries have confirmed their presence in the Vienna meeting, including Azerbaijan, Kazakhstan, Oman, Mexico, Russia, Sudan, South Sudan, Bahrain and Malaysia. Bolivia on the other hand, though not confirmed, is said to be another non-Opec nation that could attend the talks.
While a potential cut by non-Opec nations is not yet confirmed, Russia, which is expected to shoulder half of the reduction, has recently said it was optimistic that non- oil producing countries will agree to the oil production cuts.
Khalid al-Falih, Saudi Arabia's energy minister also expressed a similar confidence on Friday. "We will know the exact numbers tomorrow but I am expecting about 10 to 11 (non-OPEC) countries to be on the final declaration with specific numbers," he said, according to Reuters.