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Kpler Data: Saudi Arabia's Oil Exports Fall to Lowest In Decade

Recent data from Kpler reveals a significant decline in crude oil exports from major OPEC+ producers in June, driven largely by weak demand in Asian markets and increased domestic consumption in the Middle East. This has resulted in Saudi Arabia's exports plummeting to their lowest level in over a decade.

OPEC+ production fell to its lowest point of the year as Saudi Arabia, Russia, and Iraq all implemented cuts to curb overproduction and respond to lower Asian demand. Saudi exports decreased dramatically by 930,000 barrels per day to 5.42 million barrels per day, a level not seen since at least 2013. Other Middle Eastern producers, including Iraq, Kuwait, Iran, and the UAE, also reduced their exports significantly.

In June, Middle Eastern crude flows hit a three-year low, primarily due to reduced availability of medium-density grades. This decline is attributed to stronger domestic consumption, higher crude burn for power generation, and possibly coordinated efforts to tighten the market. Saudi refinery runs rose by 207,000 bpd to 2.7 million bpd, driven by the return of major units from maintenance, and crude burn increased by 81,000 bpd to 553,000 bpd.

The key factor behind the export reduction is the tepid demand from Asian markets. China’s economic indicators, such as PMIs, are below 50, signaling contraction. India’s imports of Saudi oil fell to a ten-year low in June at 428,000 bpd. As the monsoon season approaches, Indian imports are unlikely to rebound soon. The weak demand has prevented a rebound in the Asian medium sour crude market despite reduced cargo availability.

Prices for Middle Eastern medium sour grades have softened due to weak demand and ample supplies. The reopening of the West-East arbitrage window and attractive Russian crude prices are expected to draw interest away from regional grades. This scenario suggests that producers may further cut their official selling prices (OSPs) in the coming months.

By Julianne Geiger for Oilprice.com

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  • Mamdouh Salameh on July 10 2024 said:
    The dramatic decline of Saudi crude oil exports by 930,000 barrels a day (b/d) in June to 5.42 million barrels a day (mbd) has virtually nothing to do with claimed lower Asian demand because this isn't the case or increased consumption of oil for central heading during the summer months since this is a constant factor repeated every year and everything to do with declining Saudi production.

    For the last 70 years 90% of Saudi production has been coming from five giant but now aging and fast-depleting oil fields (Ghawar, Safaniya, Shaiba, Khrais and Zulu) which are now being kept in production by the injection of billions of gallons of water.

    My estimate of Saudi production is 6.0-6.5 mbd. That is why I expect Saudi exports to decline soon to 2.5-3.0 mbd.

    By 2030 Saudi Arabia will be left with 400,000 b/d to export and would have virtually ceased to remain an oil exporter.

    Declining Saudi exports will become a permanent feature of the market.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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