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Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

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OPEC Fails To Cut Oil Exports Below 2016 Levels

OPEC

OPEC exported 25.19 million bpd of crude oil last month, the lowest since April this year, Thomson Reuters Oil Research said, but the eight-month average for the year to date was 25.05 million barrels, exceeding the average for the corresponding period of 2016, which stood at 24.85 million bpd.

What’s more disheartening for the cartel, which has been cutting production since last December, is that the August fall was mostly a result of supply disruptions in Africa rather than the outcome of the conscious effort.

“Crude oil exports from OPEC’s African members tumbled by 540,000 bpd month-on-month to below 5 million bpd after posting their highest export volumes in July since at least Jan. 2015, thereby breaking a four-month streak of rising exports,” the research unit said in a report on Wednesday.

While this fall in crude oil exports from Africa compensated for higher shipments from Middle Eastern OPEC members, it will likely be short-lived, Thomson Reuters Oil Research said. The crisis in Venezuela, however, which was the other main contributor to the 370,000-bpd decline in OPEC exports from July to August, will probably persist, providing further support for lower exports.

Yet not everyone agrees with Reuters figures. Earlier this month, energy data provider Kpler reported that OPEC’s August exports averaged 25.897 million barrels daily, on the back of Saudi Arabia’s 494,000 bpd cut in shipments as per its pledge to export no more than 6.6 million barrels in that month. Related: The Next Step In Mexico’s Oil & Gas Privatization Push

According to Kpler, three African members of the cartel actually increased their exports in August: Algeria, Angola, and Nigeria. The combined increase from these three countries exceeded 350,000 bpd.

OPEC officials insist that the output cut deal is working and global supply is falling, despite export patterns. Even so, the deal might get another extension beyond March 2018, as per comments made yesterday by Russia’s Energy Minister Alexander Novak. The chance of this happening remains uncertain but the option is on the table.

By Irina Slav for Oilprice.com

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  • Tom on September 07 2017 said:
    Demand moves with the people. Supply in the Gulf may be destroyed by next Wednesday. Where will it turn?
  • Chad Schieck on September 08 2017 said:
    Smoke and mirrors from OPEC for the last couple of years. They will say anything to move the needle on prices without physically doing a single thing. The power of the spoken and written word has been a band aid trying to stop the hemorrhaging of cash in the Middle East. Eventually it will collapse upon itself because the money simply hasn't been there and it will not return.

    Another 24 months of this and it will look like Detroit Michigan.

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