Opec Exports More Oil than Agreed in Feb: Kpler

Seaborne crude oil exports rose to 26.8mn barrels/day in February, up by 757,000 b/d compared with January, according to consultancy Kpler. The increase comes despite Opec+ deciding to keep supply steady for February, and Saudi Arabia pledging an additional, voluntary 1mn b/d production cut, it said.

Prices for crude however have borne the extra supply, with Dated Brent (April) crude contract at about $63.60/barrel at time of press, $3/b above the US benchmark, WTI and $6/b above its February 2 close. However there was some profit-taking on the eve of the meeting.

Most members boosted oil exports, some more than others. Iraq was up 291,000 b/d and Nigeria 200,000 b/d. Kazakhstan exported almost 350,000 b/d more oil during the month while another Opec+ country. Russia, exported 73,000 b/d more compared with the January meeting agreement of 65,000 b/d.

The largest declines were seen in Iran, Saudi Arabia, Equatorial Guinea and the UAE (down by a combined 666,000 b/d. Despite pledging to cut production by 1mn b/d, Saudi Arabia's exports only fell by 194,000 b/d while its domestic inventories fell by only 119,000 b/d. Kpler says Aramco did not entirely follow suit on the energy minister's vow to decrease production by 1mn b/d, although exports in late February have weakened, a sign cuts are slowly taking place.

The group is expected to bring an additional 1.5mn b/d of supply in April (of which 1mn b/d is from Saudi Arabia, ending its voluntary February and March cuts, and 0.5mn b/d from the rest of Opec+. 

Lower compliance and higher prices could raise new issues, particularly between Russia on one side, and Saudi Arabia and the UAE on the other. Russia enjoys a much lower fiscal breakeven price and is concerned about higher prices that could stimulate competition from US shale players.

According to Norwegian consultancy Rystad, that has already happened. It said the market had priced in a rise of up to 500,000 b/d, and the present price "had already triggered increased oil production activity across the Atlantic in the Americas." It said it did not expect Saudi Arabia to bring back all the 1mn b/d at once, but to raise exports gradually.