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Oil Bounces Back on Rate Cut Optimism

Oil Bounces Back on Rate Cut Optimism

The market reacted positively to…

Saudi Arabia’s Crude Oil Exports Slumped To 28-Month Low In August

Saudi Arabia’s crude exports plunged to a 28-month low in August as the world’s largest crude oil exporter continued to cut its production to “stabilize” the market, data from the Joint Organizations Data Initiative (JODI) showed on Monday.   

Saudi crude oil exports fell to 5.58 million barrels per day (bpd) in August, down by 428,000 bpd from July—the lowest level in 28 months, according to the latest available data in JODI, which compiles self-reported data from many countries.

The Kingdom’s crude oil exports have been steadily falling since March this year, from a high of over 7.5 million bpd in January, due to the OPEC+ cuts in which Saudi Arabia reduced production by around 500,000 bpd, and to the voluntary Saudi cut of 1 million bpd, which is now extended until the end of this year.

In August, Saudi Arabia’s crude oil production dropped by 95,000 bpd to 8.92 million bpd, the lowest in 27 months, according to the JODI data published today. The Kingdom started to implement the voluntary cut of 1 million bpd in July this year.

After extending the production reduction for a month for two consecutive months, Saudi Arabia said in September it would extend the extra cut until the end of 2023.

Earlier this month, Saudi Arabia and Russia, the key OPEC+ partners, said they are keeping their oil supply cuts in November despite the crude oil price rally in September.

Both Saudi Arabia and Russia reiterated that the ongoing oil supply cuts were aimed at keeping “stability and balance on the oil markets.”

The Saudi production cuts and the drop in its crude oil exports have been tightening the oil market in recent months. The lower supply sent prices soaring to the highest level so far this year at the end of September.

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By Charles Kennedy for Oilprice.com

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  • Mamdouh Salameh on October 16 2023 said:
    Declining Saudi oil production and exports are going to become a permanent fixture of the global oil market.

    This has nothing whatsoever to do with the Saudi voluntary production cut of 1.0 million barrels a day (mbd) and everything to do with production difficulties.

    My analysis is based on the undeniable fact that 90% of Saudi production has for the last 70 years been coming from five giant fast-depleting and aging oilfields (Ghawar, Safaniya, Hanifa, Khurais and Zuluf) all of which are more than 73 years old and are being kept producing by an injection of billions of barrels of water. That is why a reduced Saudi production could become a permanent feature of the market.

    By 2030 I project that Saudi Arabia could be left with an estimated 120,000-400,000 barrels a day (b/d) to export at which time it would have virtually ceased to remain an oil exporter.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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