OPEC+ oil exports declined in June – Kpler
Weak oil demand from Asian countries and increased Middle Eastern domestic consumption led to a decline of about 1.6 million b/d in crude oil exports from major OPEC+ producers in June, data from cargo tracking platform Kpler showed.
PHOTO: Oil pump jacks pictured at night. Getty Images
Saudi Arabia's oil exports hit a record low in June, according to a recent Kpler report, as OPEC members continued to voluntarily cut back on crude oil production in an effort to control global oil prices.
Oil production slumped to its lowest level this year as major OPEC+ producers Saudi Arabia, Iraq, and Russia continued to reduce production to restrain the past months’ overproduction and address the lack of demand in Asian markets, Homayoun Falakshahi, senior oil analyst at Kpler said.
Saudi Arabia’s exports plummeted by 930,000 b/d to 5.42 million b/d in June, marking the kingdom’s lowest monthly output since 2013, Kpler data showed. “This drop is even lower than during the COVID-19 pandemic and much lower than the average of 6.4 Mbd [6.4 million b/d] recorded in the first five months of the year,” the report stated.
Other leading producers of the region, including Iraq, Iran, Kuwait, and the UAE, also reduced exports substantially in June, Kpler’s report suggested. Iraq reduced exports by about 239,000 b/d in June, followed by Kuwait (140,000 b/d) and Iran (48,000 b/d). OPEC+’s leading producer, Russia, also cut oil exports by 27,000 b/d to 3.58 million b/d in June. Brazil, another major OPEC+ producer, also saw exports decline by 320,000 b/d month-on-month, partly due to upstream issues at the Tupi and Buzios FPSOs, Kpler’s report noted.
Higher crude demand in the Middle East
A spike in domestic consumption in June led to increased demand for crude oil in the Middle East, which in turn had an impact on oil exports. Saudi Arabian refiners increased production by about 207,000 b/d after two major refineries went online post-maintenance. “Additionally, temperatures in Riyadh have risen to nearly 50°C, leading to increased crude burn, which we estimate has risen by 81 kbd [81,000 b/d] to 553 kbd [553,000 b/d] this month [June],” Falakshahi said.
A similar situation was seen in Iraq and Iran, where refinery run rates were hiked amid high HSFO demand from the power sector, Kpler’s report suggested. “The fact that all major OPEC+ producers have reduced exports could potentially indicate concerted action aimed at tightening the market just as the summer season starts in the northern hemisphere,” Falakshahi added.
Tepid demand from Asian markets
Crude flows from the Middle East hit a three-year low in June because of the “state of demand in Asian markets,” the report noted. Asian buyers, especially China, imported less oil, primarily due to a contraction in the country’s economy.
Indian refiners imported around 428,000 b/d oil from Saudi Arabia in June, compared to an average import of 707,000 b/d in 2023. India's imports of Saudi crude have decreased for the fourth consecutive month and reached a 10-year low in June, Kpler’s data showed. “With the monsoon season approaching, Indian oil imports [from Saudi] aren’t likely to rebound much,” Falakshahi said.
By Aparupa Mazumder
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