Saudi Arabia reduces oil exports

As Saudi Arabia is fulfilling obligations under an OPEC+ agreement to support global markets of crude oil, the kingdom sharply cut exports in November. 

According to information provided by energy analytics firm Kpler Ltd, by the middle of November exports from Saudi Arabia decreased by nearly 430,000 barrels a day. This is 6% lower than in October. According to the data provided by another organization, Vortexa Ltd, November’s decrease turned out to be even greater by 676,000 barrels a day.

As it was stated by Kpler’s analyst in Vienna Viktor Katona, Saudi Arabia has been reducing exports for the last two months. 

At the same time, Saudi Energy Minister Prince Abdulaziz bin Salman spoke out in defense of export reduction by saying it was necessary for bringing more balance to the already highly uncertain economic environment in the world. According to his words, OPEC+ remains cautious, while Saudi Arabia attempts to serve as a role model for other members of the organization by strictly following the agreements. In his opinion, if the kingdom quickly meets the obligation to reduce exports, other countries will follow.

Daniel Gerber, chief executive officer of Petro-Logistics SA, described lower exports from the 13 OPEC member countries in early November as "quite significant," meaning a cut of more than 1 million barrels per day.

In general, oil flows are expected to decline by 1 million barrels per day, even though supplies may increase by the end of the month. This volume is roughly equal to the full OPEC+ cuts negotiated. 

Speaking about other OPEC countries in the Middle East, the decline indicators are still not definite, while export data for the first half of the month may give a distortion-prone, incomplete picture.

During the first two weeks of November, supplies from Iraq fell by 308,000 barrels per day, or about 9%. Kuwait exports didn't see significant changes, while UAE imports rose by 379,000 barrels per day, i.e. nearly 12%.

Bloomberg notes that it is common for the UAE to make large shipments earlier in the month, falling in the second half. 

Another reminder is the UAE's past intentions to boost production capacity using the state funds. The Emirates were not eager to reduce supplies, leading to a conflict last year that nearly splintered the international organization. 

Some OPEC+ delegates said in private conversations that the current cuts had no support from the UAE either. However, other members expressed no backing for these statements. UAE Energy Minister Suhail Al Mazroui referred to the cut as the right thing to do.

The OPEC+ alliance's output policy for the coming year will be discussed on December 4 in Vienna.