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Saudi Arabia’s crude oil exports jumped to a 22-month high of 7.70 million bpd in October, as OPEC’s biggest oil producer and exporter ramped up shipments ahead of the return of the U.S. sanctions on Iran.
According to data by the Joint Organisations Data Initiative (JODI) database, which collects self-reported figures from 114 countries, Saudi Arabia’s crude oil exports in October increased by 268,000 bpd from September to the highest level since January 2017, when the initial OPEC/non-OPEC production cut deal began.
Saudi Arabia’s crude oil exports in September had also increased from August – by 219,000 bpd from August to a high of 7.43 million bpd, Saudi Arabia’s self-reported data to JODI showed last month.
The high Saudi oil exports in September and October were in response to the U.S. pledge to drive Iranian exports down to ‘zero’, which market participants interpreted as an imminent supply crunch. Saudi Arabia, the UAE, Kuwait, and Russia moved in the summer to pump more crude to offset what was expected to be a significant loss of Iranian supply when U.S. sanctions on Iran’s oil return.
In November, the month in which the sanctions snapped back, Saudi Arabia massively increased its oil production to an all-time high. Crude oil production in Saudi Arabia surged by 377,000 bpd from October to 11.016 million bpd in November, according to OPEC’s secondary sources.
The U.S. sanctions in early November, however, came with waivers allowing eight Iranian customers to continue importing oil from Iran for another 180 days. The market turned its attention to the building oversupply with the increased production at OPEC’s Arab Gulf allies and Russia.
Earlier this month, OPEC and its Russia-led allies reached a deal to reduce their combined oil production by 1.2 million bpd for six months starting January.
In line with its pledge in the new OPEC+ deal and considering weaker seasonal demand, Saudi Arabia could cut its crude oil exports in January by 1 million bpd to 7.3 million bpd from the November export level of 8.3 million bpd.
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.