Saudi's Energy Minister Khalid al-Falih announced the move in an interview with the Financial Times published Tuesday, as the kingdom seeks to drive up oil prices to help fund an economic transformation plan.
While US crude production is expected to grow by an amount that exceeds Venezuela's current output, the IEA warned that quantity is not the only important issue.
USA sanctions on Venezuela's state-owned oil company are tightening the global oil market and sending refiners around the world scrambling to find replacements for the country's diesel-rich heavy and extra heavy crudes. In quality terms, it is more complicated.
Given the six- to eight-week sailing time between the Latin American country and destinations in Asia, it's likely that the pinch of USA sanctions will only be felt in April, given that all February cargoes and most of March's are already en route.
This implies that the global market would see a slight surplus of about 200,000 bpd in 2019 should OPEC keep pumping at January's rate although - other things being equal - the Saudi plan to reduce supply further will offset this.
Furthermore, the report affirmed that in 2019, demand for OPEC crude is forecast at 30.6 mb/d, around 1.0 mb/d lower than the 2018 level.
Markets are tightening because of voluntary production cuts, effective since January 1, led by the Organization of the Petroleum Exporting Countries and allies including Russian Federation aimed at forestalling a global glut.
Oil prices rose early on Wednesday, supported by a renewed commitment of OPEC and its de facto leader and biggest producer Saudi Arabia to cut deeper than pledged and do "whatever it takes" to rebalance the market.
However, rising USA oil production, fighting near Libya's main oilfield, sanctions on Venezuela and suspense over whether Washington will grant more waivers to import Iranian oil leave markets unsure about broader supply.
Basra Heavy, as assessed by Argus Media, was at $60.17 a barrel on Tuesday, while Bonny Light was at $64.38.
"In quantity terms, in 2019, the USA alone will grow its crude oil production by more than Venezuela's current output".
The global oil market remains well supplied, the International Energy Agency said in its monthly market report on Wednesday and output would still likely outstrip demand this year, despite OPEC's efforts and USA sanctions on Iran and Venezuela.
While global markets remain comfortably supplied, disruption in Venezuela poses a threat because production of the heavier, higher-sulfur crude it pumps is being reduced elsewhere, the IEA said in a monthly report. Distillate inventories decreased by 2.481 million barrels versus an expected draw of 1.090 million barrels.
- Disney releases long-awaited ‘Frozen 2’ trailer - and it does not disappoint
- PSG boss Tuchel surprised by Man Utd treatment of Di Maria
- Ravens agree to trade Joe Flacco to Broncos
- Why Are People Criticizing Jennifer Lopez's Motown Tribute at the 2019 Grammys?
- China trade talks resume this week in Beijing
- Derryn Hinch to vote with Labor and pass refugee medical transfer bill
- Ryan Wilson to miss remainder of Six Nations with knee injury
- A Look At Vaccinations In N.H., As Measles Cases Spike Elsewhere
- Ole Gunnar Solskjaer: Manchester United not dead in Europe despite PSG defeat
- Illegal Alien Confesses to Murder of New York Woman: 'We Are Devastated'