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OPEC+ Oil Production Could Dip In September

OPEC+ Oil Production Could Dip In September

The 100,000 bpd production target…

OPEC Sets The Stage For New Output Cuts

OPEC Sets The Stage For New Output Cuts

OPEC's small 100,000 bpd production…

All Hopes Are Dashed For International Oil Companies In North Iraq

All Hopes Are Dashed For International Oil Companies In North Iraq

International oil companies operating in…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Saudi Arabia To Cut Oil Exports By 1 Million Bpd Next Month

Saudi Arabia could reduce its daily crude oil shipments abroad by as much as 1 million barrels next month, Reuters reports, quoting unnamed sources close to Riyadh. According to them, the move would be motivated by weaker demand due to seasonal patterns in consumption and Saudi Arabia’s commitment to the new production cut agreed last week in Vienna.

In total, the sources said, Riyadh will likely export an average 7.3 million bpd in January. This compares with less than 8 million bpd this month, also a decline from November, when the Kingdom exported 8.3 million bpd.

Saudi Arabia will once again shoulder the greatest burden of the OPEC-wide cuts, cutting 500,000 bpd from its December production levels, which stand at an average 10.7 million bpd, the same as in October. The cartel and its partners agreed to cut production from October levels, by 2.5 percent for every OPEC member besides Libya, Iran, and Venezuela.

Saudi Arabia pumped a record-high of over 11 million bpd in November, after in June, the Kingdom agreed with Russia and other OPEC members to start increasing production again as Brent soared over US$80 a barrel to the disgruntlement of large importers such as India and the United States.

In exports, Saudi Arabia’s hit their highest in 20 months in September, according to data by the Joint Organisations Data Initiative (JODI) database, which collects self-reported oil figures from 114 countries. The Kingdom’s production in early November probably hit the highest on record, on the back of high customer requests made in early October when the market feared a hefty loss of Iranian supply last month.

Over September, October and November, however, Riyadh gradually cut shipments to the United States in a bid to prop up fast-falling prices. This month the cuts will continue, globally, due to weak seasonal demand.

By Irina Slav for Oilprice.com

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Leave a comment
  • miriam da silva callegari on December 10 2018 said:
    It is a bluff. It is better cash in now at any price than MAYBE cash in later at higher price. Cut is economically stupid
  • Mamdouh G Salameh on December 10 2018 said:
    There are some inaccuracies in your article about numbers relating to Saudi Arabia’s production and exports.

    First Saudi oil production could never ever have reached 11 million barrels a day (mbd). Saudi production peaked in 2005 at 9.6 mbd and has been in decline since. The maximum Saudi Arabia could produce is 9.4-9.5 mbd. Saudi Arabia has no spare production capacity. The 400,000 barrels a day (b/d) that Saudi Arabia added to the market in June did not come from production but from oil stored on board tankers at sea or on land. This means that Saudi production plus withdrawal from storage amounted to almost 10 mbd. This is in line with Saudi average daily production of 9.959 mbd and average daily exports of 6.968 mbd in 2017 according to the 2018 OPEC Annual Statistical Bulletin.

    Assuming consumption remained the same in 2018, then exports in 2018 could not have been more than 6.8-6.9 mbd. So the claim that Saudi oil exports could average 7.3 mbd in January 2019 is not correct particularly after we deduct the agreed OPEC cuts. Saudi exports in the first quarter of 2019 could average 6.3-6.4 mbd only.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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