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Saudi Arabia surprised the oil market in early January by announcing it would unilaterally cut its oil output by an extra one million barrels per day beyond its agreed OPEC+ target.
During the March 3rd webinar, Vortexa experts Clay Seigel, Conor Stone, and Will Holeman discussed the impact of the Saudi cut on the oil market and the tanker freight market, with consequences for players ranging from US shale operators and refiners to midstream asset owners and financial oil investors.
Key topics covered:
- Saudi Arabia's crude export volumes
- Top destinations for Saudi Arabian oil exports: cuts to nearly every market
- Top sources for Indian crude oil imports: Saudi down, Kuwait and Iraq up
- US crude exports in February: complications from the freeze
- Floating storage: receding to pre-pandemic volumes
- Backwardation supporting inventory draws & near-term prices
Vortexa takeaways from the session:
- Saudi Arabia’s voluntary production cut is largely apparent from our export numbers that show a ten percent decrease during January and February together
- The Saudi cut, along with OPEC+ supply limits, has caused oil inventories to draw and the price curve to become backwardated. This has attracted managed money back into oil as an asset class
- So far US production has not rebounded along with the price of oil. But US barrels are still in demand around
the world, and are well positioned to maintain their international market share in competition with OPEC+
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