Crude oil supply from OPEC members has soared by more than 2 million bpd in April to the highest levels since December 2018, oil-flow tracking company Petro-Logistics said on Tuesday.
The highest OPEC supply in nearly a year and a half is being driven by record oil supply out of OPEC's top producer and the world's largest oil exporter, Saudi Arabia, and from the United Arab Emirates (UAE), according to Petro-Logistics. Another close Saudi ally in the Gulf, Kuwait, has also boosted its oil exports to multi-year highs this month, despite pledging an early production reduction ahead of the May 1 start date of the new OPEC+ deal, Petro-Logistics said in a LinkedIn post.
Last week, OPEC's fourth-largest producer, Kuwait, said that it had already started to reduce crude oil supply to international markets, "sensing a responsibility responding to market conditions," Kuwait's Oil Minister Khaled Al-Fadhel told the official state Kuwait News Agency (KUNA).
After the previous OPEC+ deal collapsed in early March following Russia's refusal to back a collective 1.5-million-bpd to counter slumping demand in the pandemic, OPEC members started to boost their oil exports, Petro-Logistics said in an analysis last week.
"By late March, Petro-Logistics reported higher export volumes out of Saudi Arabia, Kuwait and the UAE. In early April, many OPEC countries had ramped up supply with Saudi Arabia surpassing the 12.3 mb/d it had announced. Saudi exports jumped, reaching 10.000 mb/d for the first two weeks of April. Similarly, compared to the second half of March, Kuwaiti exports were up as were those out of Nigeria and the UAE," Petro-Logistics said.
As the May 1 start date of the new deal approaches, Saudi Arabia signaled to the market that it had already started cutting its oil production ahead of the official start of the new OPEC+ pact.
Analysts, however, think that the nearly 10 million bpd OPEC+ cuts in May and June will be too little too late to support the market, considering that the current demand loss stands at around 30 million bpd-three times the cuts promised by OPEC and its allies.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More