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Oilfield services provider Schlumberger (NYSE:SLB) shares have tumbled over 9%, while Halliburton (NYSE:HAL) and Baker Hughes Company (NASDAQ:BKR) are down more than 4%.
Aramco has been ordered by the Saudi government to reduce its maximum sustainable oil production capacity to 12 million barrels per day (bpd), one million bpd below a target announced in 2020.
Oilfield companies have benefited from increased international and offshore oil exploration and production, primarily in the Middle East and Africa. At the same time, many shale companies in the United States have tightened their drilling operations.
The move could be representatve of a change in the outlook for global oil demand in Saudi Arabia, according to analysts.
