LONDON: Saudi Arabia, the world’s largest oil exporter, has boosted output in August to a record high, a Reuters survey found yesterday, partly offsetting a plunge in Libyan supply that has reduced Opec output.
Supply from the Organisation of the Petroleum Exporting Countries has averaged 30.32 million barrels per day (bpd), down from a revised 30.50 million bpd in July, the survey of shipping data and sources at oil companies, Opec and consultants found.
The survey shows internal strife is undermining supply from African Opec producers. The outages plus concern about a military strike against Syria pushed Brent crude to a six-month high above $117 a barrel this week.
“While Saudi Arabia may be stepping up production, the outage of Libyan crude oil alongside multiple declarations of force majeure on exports by fellow Opec member Nigeria will remain supportive of Brent prices,” said Harry Tchilinguirian, head of commodity market strategy at BNP Paribas in London.
“The reason is because the crudes are of very similar quality to Brent and priced off the North Sea benchmark.”
In August, involuntary curbs in Libya and no significant recovery in Nigeria have outweighed the extra Saudi crude and a rebound in Iraq’s exports. Saudi supply to market in July was revised up by 250,000bpd.
Saudi Arabia, industry sources say, has produced 10.05 million bpd in August, adding to earlier increases due to higher use in refineries and domestic power plants to meet demand for air conditioning. A Saudi official did not respond to a Reuters request for comment. “Output in July was up but this was not due to exports, but rather due to increased refinery runs and direct burn,” said an industry source who tracks Saudi output. “The increase in August is mainly reflecting higher exports.”
Saudi crude output of 10.05 million bpd would be the highest since records began in 1980, according to figures from the US Energy Information Administration.
With the upward revision to July, Opec’s August output is the lowest since March 2013, when the group pumped 30.18 million bpd, according to Reuters surveys, and leaves supply a mere 320,000 bpd above its output target of 30 million bpd.
The most notable drop in Opec output has come from Libya. Protests at oil fields and terminals have cut supply to a monthly average of 500,000bpd, according to the survey.
Output, at 1.4 million bpd earlier this year, had slumped to 250,000bpd or lower by late August.
Supply in Nigeria, increasingly disrupted by oil spills and theft from pipelines, remains far below its potential with exports of crudes including Bonny Light under force majeure, even after a small rise in August.
Output fell slightly in Angola due to reduced production and a force majeure on exports of Saturno crude.
Iraq’s exports have rebounded due to increased shipments from southern ports. Iraq allocated extra oil to some customers, trade sources said, before an expected slowdown in September due to maintenance work. Exports remain under pressure in the north, where Sunni insurgents are targeting Iraq’s pipeline to Turkey.