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In recent months, OPEC has been boosting production to ease concerns over high oil prices, given the expected supply shortages from Venezuela and Iran.
Saudi Arabia's main producer and exporter of the cartel has specifically targeted an increase in crude oil exports to the most transparent market, the United States, which reports weekly crude oil import and inventory levels.
On the one hand, the Saudis are looking to regain a foothold in the US market after cutting shipments to the US to their lowest level in 30 years at the end of last year, when the efforts of the United States OPEC to clear the bather full.
On the other hand, the Saudis respond to the demands of their loyal ally, US President Donald Trump, who has repeatedly OPEC slammed for high gas prices, urging the cartel in early July to "REDUCE PRICES NOW!"
In the week to August 31, the four-week average of US crude oil imports from Saudi Arabia surpassed the one million barrels per day for the first time since June 2017, according to data from the United States. EIA.
At that time last year, Saudi Arabia had begun to deliberately reduce its exports to the United States, where inventory data and refining operations were reported weekly. These reports influence the price of oil and investor sentiment.
In the last week of October 2017, the four-week average of US imports from Saudi Arabia was only 506,000 barrels per day, nearly half of the four weeks of the last week August.
In October 2017, US imports from Saudi Arabia stood at 582,000 barrels a day – the lowest since November 1987 – while the OPEC leader and his counterparts in the United States 39, OPEC and Russia's non-OPEC allies the overabundance of oil that has weighed on oil prices and on the incomes of oil-producing countries.
In the spring of this year, it became clear that OPEC and its friends have fulfilled their mission to establish world stocks at the five-year average. The oil market tightened, but the OPEC leader, Saudi Arabia, continued to pledge to continue the production pact at least until the end of this year.
However, the United States announced the return of sanctions against Iran, including on its oil, Venezuela's production continued to fall from 40,000 to 50,000 barrels a month, the breakdowns in Libya and Nigeria were continued.
Consumers and major oil-importing nations have begun to worry about high oil prices, and analysts have begun to wonder if $ 80 oil was the beginning of the destruction of demand. President Trump has entered the debate with several tweets targeting OPEC and its pricing policies.
After OPEC and its allies decided in June to cut compliance rates, that is, to boost production, US imports from Saudi Arabia began to rise again , exceeding one million barrels at the end of last month. This was done at the expense of another oil supplier from the Middle East, Iraq, whose crude oil exports to the United States rose from more than 800,000 barrels in April less than 400,000 barrels a day. of August 31st.
The largest US refinery, the 600,000 bpd Motiva refinery in Port Arthur, Texas, controlled by Saudi Aramco, has resumed boosting Saudi imports. Last year, Saudi oil production was reduced and at one point it imported more Iraqi oil than Saudi oil, according to Bloomberg. But in recent months, Motiva has resumed purchases of Saudi oil, EIA data reviewed by Bloomberg.
The low level of crude oil shipments in the Middle East to the United States has begun to change, said at a conference last week, Gary R. Heminger, CEO of the second largest refiner in the United States, Marathon Petroleum Corporation.
"Middle Eastern producers are becoming much more aggressive, wanting to bring their barrels back into this market, this market is very important to them," Heminger said.
Saudi Arabia's crude oil shipments to the United States last month and this month are expected to hit the two-month highs since February and March 2017, according to Thomson Reuters trade flow data. A total of 41.5 million barrels of Saudi oil is expected to arrive at the Gulf Coast and West Coast until mid-October, with imports from the West Coast having reached their highest level since August 2013.
Saudi Arabia is resuming its crude oil exports to the United States to achieve two goals: regain market share and limit oil and gas prices in the United States, at least until the election of the United States. mid-November.
By Tsvetana Paraskova for Oilprice.com
Disclosure: I / we have no position in the actions mentioned and we do not plan to enter positions in the next 72 hours.
I have written this article myself and it expresses my own opinions. I do not get compensation for that. I have no business relationship with a company whose stock is mentioned in this article.
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