Saudi Crude Exports Jump in June as OPEC Oil-Cuts Deal Fades
(Bloomberg) -- Crude oil exports from Saudi Arabia surged to a 15-month high in June as the kingdom ramped up production and helped to convince OPEC to boost its overall supply.
Observed shipments from the world’s largest oil exporter jumped to 7.47 million barrels a day last month, compared with 7.15 million barrels a day in May, according to Bloomberg preliminary calculations from vessel-tracking and ship-fixture data.
An increase in monthly shipments to nations including India and South Africa outweighed a dip in flows to some major destinations such as China and Japan. At least 289,000 barrels a day of cargoes that loaded at Saudi ports on the Red Sea and Persian Gulf in June haven’t yet identified specific destinations.
Saudi Arabia had been pushing for the Organization of Petroleum Exporting Countries to agree to an output increase at the group’s meeting in Vienna on June 22, amid production declines from other members. OPEC and allies including Russia agreed to scale back their over-compliance with supply cuts, a move that Saudi Energy Minister Khalid Al-Falih indicated would add close to 1 million barrels a day to the market. He said the kingdom had already begun to boost output in anticipation of OPEC’s decision.
Saudi Arabia is under pressure from U.S. President Donald Trump to boost production in order to lower prices. Trump and Saudi King Salman bin Abdulaziz over the weekend discussed the need to balance oil markets. The Middle Eastern country has the ability to pump about 12 million barrels a day, according to the Paris-based International Energy Agency. That’s about 2 million barrels a day more than it produced in May.
State oil company Saudi Aramco plans to pump a record 10.8 million barrels of crude a day on average in July, according to people briefed on the country’s output policy. Crude output and exports aren’t perfectly correlated, due to the fact that some barrels can be moved to storage.
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