Asia's oil refiners are increasingly finding themselves trapped between the rock of OPEC's production cuts and the hard place of U.S. President Donald Trump's sanctions against Iran and Venezuela.
But, "with the import of diluents now sanctioned by the US, and problems in producing its own lighter crudes, PDVSA will have a tough job to make enough on spec barrels available for export", the IEA said.
Falih pointed out that the state-owned oil company "Saudi Aramco" was planning to develop an global energy exploration and production business, stressing that the overseas expansion would be the company future's "core pillar".
Brent crude futures were up $0.77 at $63.19 a barrel by 1225 GMT while United States crude oil futures rose $0.53 to $53.63 a barrel.
Venezuelan armed-forces backed Socialist president, Nicholas Maduro had been in the pursuit of OPEC support against U.S. sanctions inclined on country's oil industry, as Maduro sent a letter to OPEC headquarter on January 29th, citing the impact of sanctions on oil prices and the potential risk, the sanction could forge for other OPEC nations, revealed by a Reuters' reporter later on Monday (February the 11th).
"Our primary objective is to ensure that the oil market remains in balance throughout 2019 and beyond in order to build on the success of the past couple of years", the OPEC Secretary General said.
Soaring output is putting the US on course to become a net exporter of crude oil and petroleum products next year.
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None of these options are appealing, and all of them are likely to result in higher costs for refined products, particularly the middle distillates such as diesel and jet fuel that are produced in greater quantities from heavy crudes.
Before U.S. sanctions came into force at the end of January, Washington shipped large amounts of naphtha to Venezuela.
The OPEC, which Saudi Arabia de-facto leads as the world's top crude oil exporter, said on Tuesday that it had cut its output by nearly 800,000 bpd in January to 30.81 million bpd.
Hassan Rouhani's government would face even a much worse scenario if the US decides to bring Iran's oil exports down to zero.
The IEA said Tuesday that its estimates for global oil demand growth in 2018 and 2019 remained unchanged at 1.3 million b/d and 1.4 million b/d, respectively. The group made a strong start to the strategy, slashing output by 930,000 bopd to the lowest in nearly four years, the IEA said.
OPEC, Russia and other non-OPEC producers, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from January 1 to prevent excess supply building up.
OPEC cut output by nearly 800,000 bpd in January to 30.81m bpd. The so-called OPEC+ alliance aims to prevent another price-crushing oil glut like the one that gripped the market between 2014 and 2016.