Saudi crude oil exports plummeted in August to the lowest in two and a half years as the Kingdom continued to slash production by 1 million barrels per day (bpd) to keep markets tight and push oil prices higher.
Shipments out of the world’s top crude exporter fell in August to the lowest levels since March 2021—to around 5.6 million bpd, with exports to China and the U.S. slumping to multiyear lows, preliminary data compiled by Bloomberg showed on Friday.
The export volume estimated in August compares with crude oil exports of some 6.3 million bpd in July.
According to the shipments observed by Bloomberg, Saudi crude oil exports to China fell to the lowest since June 2020, those to Japan and South Korea fell to the lowest level since Bloomberg began monitoring them in 2017, and Saudi exports to the United States were the lowest in at least six years at just 81,000 bpd.
Since July, Saudi Arabia has been cutting an additional 1 million bpd off its oil production, on top of its share in the cuts by several major OPEC+ members including top Middle Eastern exporters.
The Saudi cut means that the Kingdom is now pumping around 9 million bpd and will continue to do so until at least the end of September.
The Saudi cuts have tightened the market and started to draw down inventories, analysts say, with many expecting the Saudis to announce next week another extension of the cuts into October.
“OPEC+ cuts, and in particular additional voluntary cuts from Saudi Arabia, mean that the market is drawing down inventories,” Warren Patterson, Head of Commodities Strategy at ING, said on Thursday.
“We expect this trend will continue until the end of the year, which suggests that oil prices still have room to move higher from current levels.”
As of Friday morning ET, Brent prices were up at $87.70 and WTI Crude had risen to $84.50 as oil prices were on track for a weekly gain.
By Tsvetana Paraskova for Oilprice.com
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