Saudi Arabia is set to reduce oil supplies to its customers by more than half a million barrels per day in September, according to industry sources familiar with the matter. After promising to cut production by 486,000 barrels per day last November, after a review meeting in Russia’s St. Petersburg, Saudi Arabia made an additional pledge to reduce exports by almost a million barrels per day. It looks that despite some doubts by market analysts, Saudi Arabia remains committed to its pledge. It is set to reduce supplies to Asian markets by as much as 10 percent.

The action is part of Saudi Arabia’s pledge to do whatever it takes to balance the oil market. Asian buyers would soon be forced to become increasingly reliant on producers in the Atlantic Basin in order to meet their crude oil requirements. He also suggested that Russia would most likely gain further market share from Saudi Arabia as a result of the Middle Eastern country's self-imposed cut to crude oil allocations.

Why is Saudi Arabia ready to lose market share?

The answer lies in the decision made by the then Saudi deputy crown prince, Mohammad bin-Salman, who was recently promoted to the post of Crown prince and currently governing the Kingdom in absence of his father, to put a percentage Saudi Aramco up for sale. While the prince expected the valuation of Aramco to reach $2 trillion thanks to large oil deposits in Saudi Arabia, lower oil price forced investment banks working on the issuance to cut the expectations to below $1 trillion.