In August, Saudi Arabia saw a significant drop in its crude exports. They’re leading the OPEC+ alliance’s effort to limit production and boost oil prices. According to Bloomberg data, the observed flows from the kingdom fell to about 5.6 million barrels a day, the lowest since March 2021. In comparison, they were at 6.3 million barrels a day in July. Shipments to major destinations like China and the US took a big hit, reaching multiyear lows.
The move is expected to cause prices to rise in the USA further revealing the destruction Biden has done by limiting United States oil production.
The Organization of Petroleum Exporting Countries and its allies, including Russia, are actually restricting the oil supply in order to support the market. This is especially important because there have been signs of weak demand in major oil consumer China. Since July, Saudi Arabia has even pledged to cut its production by an additional 1 million barrels a day on top of the existing curbs.Flows to China, the kingdom’s primary market, slumped to about 1.3 million barrels a day. That’s the lowest observed since June 2020, in the early months of the pandemic, when oil demand plummeted globally. Saudi exports to Japan and South Korea in August fell to the lowest levels since Bloomberg began tracking them in 2017.
It’s worth mentioning that Saudi officials haven’t responded to a comment request about August’s oil exports yet. Plus, let’s not forget that Friday is the start of the weekend in the country. The figures compiled by Bloomberg, which are still preliminary, are pretty much in line with the ones from analytics firms Vortexa Ltd. and Kpler.
Shipments heading westward also experienced a significant decline. The observed cargoes delivered to the United States amounted to just 81,000 barrels per day, marking the smallest volume recorded in at least six years.
However, there is a possibility of change, as vessels carrying approximately 24 million barrels of Saudi crude, loaded last month, have yet to indicate their final destination. This suggests that the numbers for specific countries, particularly those receiving long-haul shipments, are likely to increase in the upcoming weeks.
It is worth noting that Saudi Arabia was not the only major energy producer in the Middle East to reduce flows in August. Shipments from Kuwait, OPEC’s fifth-largest producer, dropped to about 1.5 million barrels per day, the lowest level seen since late 2016. Additionally, shipments to China, the largest purchaser of Kuwaiti barrels, experienced a significant decline of approximately 45%.
