Stable OPEC+ Oil Exports in April Sustained by Saudi Arabia’s Increased Supply Amid Nigerian and Iraqi Disruptions
The recent drop in oil prices has nullified the gains that resulted from OPEC+’s decision to cut supply, even though the implementation of the cuts only began this month. The export trends of the OPEC+ group did not contribute to price support in April, as the overall level of exports remained steady at around 28 million barrels per day (Mbd) when excluding Iran and Venezuela. While Saudi Arabia and Russia increased their exports, offsetting declines from Nigeria, Iraq, and Kazakhstan, the group’s crude inventories remained stable at 259 million barrels (Mbbls).
In April, OPEC+ seaborne oil exports slightly increased by 5 thousand barrels per day (kbd) compared to the previous month, reaching just under 28.0 Mbd when excluding Iran and Venezuela. Nigerian shipments were negatively affected by force majeure and sabotage attacks, resulting in a decline of 403 kbd. Additionally, loading operations for northern Iraqi crude at Ceyhan were halted, leading to a decrease of 225 kbd in the country’s export level.
On the positive side, robust Saudi crude pushed the kingdom’s oil exports to their highest level since April 2020, reaching 7.74 Mbd, an increase of 395 kbd. Russia also managed to divert more flows to exports during its maintenance season, with seaborne oil exports reaching 3.73 Mbd, the highest level in 11 months. Furthermore, issues at Kuwait’s Al-Zour refinery boosted crude shipments by 93 kbd.
Despite the recent OPEC+ agreement, Saudi oil supply remained robust in April. Revised export data indicates that Saudi crude supply in April was estimated to be 10.6 Mbd, up by 400 kbd. Saudi oil exports, including Aramco’s share from the Neutral Zone, increased by 395 kbd to reach 7.74 Mbd, marking a new post-pandemic high.
However, Aramco is preparing for the upcoming cuts, which are scheduled to be implemented from May 1st. Consequently, oil exports declined to 7.22 Mbd in the second half of April, compared to 8.16 Mbd in the first half of the month. It is projected that Saudi Arabia’s May export volumes will average around 7.2 Mbd.
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Nigeria experienced the largest monthly decline in exports, with a decrease of 403 kbd compared to March, reaching an average of 1.25 Mbd in April, the lowest level in seven months. Strikes at ExxonMobil-operated FPSOs and sabotage attacks causing delays at Forcados were the main factors impacting crude loadings. Consequently, exports of the medium sweet Forcados and light sweet Qua Iboe grades decreased by 63 kbd each, with monthly averages of 188 kbd and 99 kbd, respectively.
Exports to Northwest Europe (NWE) were particularly affected, falling by 337 kbd month-on-month to 235 kbd, nearly reaching a two-year low. This decline occurred despite the end of refinery strikes in France, which should have boosted exports to NWE.
Other African producers of light sweet oil, such as Algeria and Angola, benefited from France’s return to the market and Nigeria’s export concerns. Algerian oil exports increased by 155 kbd, surpassing 500 kbd, a level similar to February. Shipments to NWE rose by 50 kbd, and those to the Mediterranean (MED) increased by 64 kbd. Strong demand for Sonatrach’s Saharan blend led to a price increase, with the grade’s discount reducing to $0.25 per barrel (bbl) from $1.25/bbl two weeks ago.
Angola increased its shipments by 62 thousand barrels per day (kbd) to reach 987 kbd. However, these figures have remained below 1 million barrels per day for the third consecutive month, highlighting short-term upstream challenges in the country. Maintenance activities at the Dalia field also have limited production.
Loadings of the heavy Dalia blend, which were at zero in March, rebounded to 96 kbd. A significant portion of Angola’s export growth was directed towards the Madre de Deus terminal in Brazil, likely due to pricing advantages since the imported crude is of medium sweet quality, similar to most Brazilian production.
As expected, the suspension of loading operations at Ceyhan continues to have a negative impact on Iraq’s overall oil exports. The country’s exports decreased by 225 kbd month-on-month to a total of 3.3 Mbd, marking the lowest level in two years. Although exports of Basrah crude increased by 126 kbd, there were no loadings of KBT or Kirkuk blends. Despite a temporary agreement between Baghdad and Erbil to restart flows, Turkey opposes the resumption, officially citing the need to assess potential threats following recent earthquakes in the region.
It has been over a month since the last cargo was loaded from the installation. Two vessels, the Nissos Kea (VLCC) and the Dali (Aframax) have been waiting to load since late March in the area. On another note, Kazakhstan’s oil exports via CPC experienced the anticipated decline, with shipments decreasing by 113 kbd to 1.26 Mbd. This decline follows a record level reached in March.
Lastly, loading operations at Bashair in Sudan have remained unaffected, so far, by the power struggle that arose two weeks ago in Khartoum. Shipments even increased by 35% to 105 kbd, although these fluctuations are not unusual given the low volumes. Three cargoes have been loaded since mid-April, with the most recent one departing on May 1st, indicating that the situation around the pipeline and the port remains normal. However, there is a high likelihood that the ongoing conflict will eventually spread to Bashair, potentially disrupting around 100 kbd of crude supply, mainly to Eastern Asia. It’s worth noting that most Sudanese and South Sudanese crude reaches Asia via Fujairah.