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The world’s largest oil exporter loaded 1 million barrels a day onto tankers bound for the U.S. in July. according to preliminary vessel-tracking data compiled by Bloomberg. That’s a 36 percent jump from June and the single biggest monthly flow to the U.S. since April 2017.
The surge in flows might help officials in Riyadh to argue that they’re responding after U.S. President Donald Trump blamed OPEC for high oil prices and called on Saudi Arabia to add supply. It also helps replace barrels that have been lost by the collapse in Venezuela. normally a major source of U.S. crude imports. according to Olivier Jakob. managing director of consultants Petromatrix GmbH in Zug. Switzerland.
`There’s been this big push from the U.S. president for Saudi Arabia to do something about the rising oil prices.` Jakob said. noting that OPEC is raising its overall output. as the producer group agreed to do at its June meeting to keep the market steady. He said the additional barrels may help stabilize the U.S. market.
Since OPEC began implementing output cuts in January 2017. Saudi shipments to the U.S. peaked at 1.3 million barrels a day in March of last year. while falling as low as 536.000 barrels a day this past February. according to vessel-tracking compiled by Bloomberg. Oil prices began to rise last year after Saudi Arabia delivered a sizable cut in exports to the U.S.. where production has soared.
With the global market largely rebalanced. and amid output declines from other members. Saudi Arabia told OPEC that it had increased production to 10.489 million barrels a day in June. That figure was said to slip last month. In addition. total Saudi crude exports fell by about 600.000 barrels a day in July.
“I would tend to see this bump in flows as a side effect of the mini-surge in production that Saudi Arabia has delivered over the summer.“ David Reid. an analyst at JBC Energy GmbH in Vienna. said by email. Since Saudi crude exports have already started to slide. higher shipments to the U.S. aren’t likely to be the start of any sustained trend. he said.
