After releasing its impressive oil consumption data for March 2023, the latest production figures from the Joint Organisations Data Initiative (JODI) show that Saudi oil exports rose slightly from 7.45 million bpd to 7.52 million bpd in February. The data also shows a slight increase in Saudi production to 10.46 million bpd ahead of the surprise production cut, which was announced during the first week of April 2023.
Market watchers have kept a close eye on both Saudi and Russian production and export figures in April and May. According to shipping data from Petro-Logistics and Kpler, both Saudi Arabia and Russia ramped up exports in April 2023, just ahead of their production cut pledges, which went into effect on May 1st 2023.
Kpler pegs Saudi export in April at 7.58 million bpd, while Petrologistics said that Riyadh increased exports by 470,000 bpd, without mentioning an exact figure. The former does expect Saudi crude exports to fall during the month of May as a direct result of its production cuts.
Russian crude exports have not let up either, and according to the Financial Times, Russian total crude exports have been higher in April 2023 than during any month since its invasion of Ukraine. The FT pegs exports at 8.3 million bpd, or around 80,000 bpd more than in March 2023.
Image source: Financial Times
With the implementation of the additional 1.16 million bpd OPEC+ production cuts, output figures are expected to be lower in May/June 2023, but exports may not necessarily follow suit. This is particularly true for Russia, which has managed to reroute a huge number of barrels to buyers in Asia, and will not be willing to surrender market share by significantly lowering exports.
However, some early signs show that Russia may actually have already cut production.
According to Kpler data, Russia’s crude production (including condensates), is expected to fall 350,000 bpd in May compared to February production to hit 10.709 million bpd. The data and analytics company doesn’t see a continued fall in Russian production for the rest of 2023, as demand from its main customer, China, is expected to further strengthen during the second half of the year. As such, Russian crude exports are not expected to taper off significantly as long as demand in Asia remains robust.
By Tom Kool for Oilprice.com
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Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations