London — Top oil exporter Saudi Arabia has yet to boost crude shipments significantly, two industry sources who track the flows said, suggesting a lack of demand despite a deep slide in prices as major producers battle for market share.
The kingdom plans to ship more than 10 million barrels per day (bpd) from May following the collapse of a supply-cut pact by the Organization of the Petroleum Exporting Countries and other producers led by Russia, known as OPEC+.
So far, exports in March are running significantly below that rate, the sources said, showing little change from February. This could reflect lower demand from customers, such as China following the coronavirus outbreak.
“Saudi March exports are so far in the 7.3 million bpd region, not more,” one of the sources said on condition of anonymity. “Total supply is way below 10 million bpd.”
Another source who tracks the exports said Saudi shipments in February would be about 7.2 million bpd. Tanker data from Refintiv Eikon put the exports even lower, at just below 7 million bpd so far in March.
Saudi oil exports averaged 7.26 million bpd in February, according to Kpler, a supply tracking firm. One of the industry sources put the February crude shipments at 7.4 million bpd.
Three years of cooperation between OPEC, Russia and other producers ended in acrimony on March 6 after Moscow refused to support deeper cuts to cope with the outbreak of coronavirus. OPEC responded by removing all limits on its own production.
Brent crude has dropped below $25 a barrel to the lowest since 2003 because of the demand collapse and the start of a fight for market share among major exporters.
Saudi Arabia made a steep cut in its official selling price for April-loading crude, and plans next month to reduce operations at local refineries to boost the potential for increased crude exports.
Before the OPEC deal collapsed, Riyadh had been over-delivering on its share of the output curb, reporting production of 9.78 million bpd in February, below its OPEC target of about 10.14 million bpd.
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