OPEC core’s oil exports drop before face-off over output targets

OPEC’s Persian Gulf exporters shipped less oil last month than at any time since June, when three of them made deeper-than-planned output reductions. The move came before talks to decide whether to ease the cuts from January, discussions that were suspended without resolution on Monday.

Combined shipments of crude and condensate—a light form of oil extracted from gas fields—from Saudi Arabia, Iraq, the United Arab Emirates and Kuwait in November were more than 400,000 barrels a day lower than in October. Japan was the only one of the region’s four major Asian customers to see increased flows, tanker-tracking data monitored by Bloomberg show. Shipments to China, India and South Korea all fell month on month, according to preliminary destination signals from ships.

The four Persian Gulf nations shipped a total of 13.36 million barrels a day of crude and condensate last month. With 26 million barrels, equivalent to almost 900,000 barrels a day, on ships yet to signal a final destination, the volumes delivered to individual countries could rise significantly.

The biggest drop came from Kuwait, where bad weather in the northern part of the Persian Gulf appeared to hamper loading operations at the end of the month. Neighboring Iraq suffered a similar disruption to shipments from its Basra Oil Terminal, which handles the bulk of the country’s crude exports.

Shipments from Saudi Arabia were also down, falling to a three-month low. In contrast, the UAE raised exports to 2.5 million barrels a day, their highest since August. The two countries are locked in a dispute over the future of the OPEC+ output deal next year, with the UAE supporting a delay to adding more supply only under conditions that the Saudis see as being unacceptable.

Observed flows from Iran have been excluded, as most of the country’s tanker fleet remains hidden from tracking.

Shipments from those four Gulf nations to China, based on preliminary destination signals from tankers, fell to their lowest level since March. Exports to the world’s largest crude importer are unlikely to exceed October’s level, even after final destinations are resolved for the ships heading to as-yet undisclosed ports. Only Kuwait shipped more oil to China last month, even as its total exports to all destinations declined.

Flows to South Korea continued to edge lower in November, dropping by about 45,000 barrels a day and setting a new low in records going back to the start of 2017. Small increases in shipments last month from Iraq and the UAE were more than offset by a slump in flows from Kuwait. The Asian nation has diversified crude imports away from the Persian Gulf, with deliveries from the four nations slipping to 56% of total imports last month, compared with 66% in May.

Aggregate Persian Gulf crude flows to India edged lower in November, as diverging demand patterns for gasoline and distillate fuels have left the country’s refineries, designed to maximize diesel output, running below capacity. Shipments in November were almost 270,000 barrels a day, or 11%, below the average seen last year.

Crude and condensate flows to Japan more than reversed October’s dip, rising to their highest level since March. Shipments from the UAE were up by 416,000 barrels a day, or 84%, and are now close to 50,000 barrels a day above their 2019 average level.

Flows to the U.S. rebounded from their October slump, with Saudi Arabia and Iraq both sending more cargoes across the Atlantic in November. Even so, U.S.-bound shipments in November were still the second lowest since the start of OPEC+ output cuts in January 2017 and that’s unlikely to change with any subsequent revisions to destinations of individual ships. The upward revision to October shipments was just 30,000 barrels a day, equivalent to a single Suezmax tanker.

Note: The figures above include exports from northern Iraq via Ceyhan in Turkey and outflows from the UAE’s Indian Ocean coast and from Saudi Arabian Red Sea ports. They include crude and condensates, a light form of oil extracted from gas fields. Figures for flows to individual destinations are subject to change, especially when ships pass transit points like Singapore and the Suez Canal.