GIQ survey: OPEC’s crude oil exports to USA continue to decline

OPEC global storyOPEC’s five-year decline in crude oil exports to the US will continue, according to 90 per cent of those polled in a Gulf Intelligence (GIQ) survey

Saudi Arabia, the largest oil producer within the OPEC has seen its crude exports to the USA drop from 1.361 mmbbl per day in 2012 to 1.052 mmbbl per day in 2015, and then to 949,000 bpd by 2017, to about 500,000 bpd by the end of 2019.

The survey was ahead of the 3rd Gulf Intelligence Middle East Energy Summit at International Petroleum (IP) Week in London.

With the rise of US shale, the USA has cut its thirst for foreign crude oil from 262.8 mmbbl per month in January 2017 to 226.6mn in October 2018—the last month for which there is data, according to the EIA.

“Whatever oil exporting opportunity still remains in the USA over the coming years will probably be taken up by those closest such as Mexico and Canada, while Middle East Arab producers will be increasingly compelled to compete for Asian market share,” said Sean Evers, managing partner, Gulf Intelligence.

About 70 per cent of those polled said they expect the OPEC+ group of 25 oil-producing countries to fully comply with their pledge to remove 1.2 mmbbl per day from the market in the first half of this year. About 52 per cent expect Brent crude prices to be US$10 lower this year and average in the US$60s a barrel range in 2019.

Oil prices broke through the US$80/bbl mark in October on the back of a very successful level of compliance throughout the year by oil producers to the previous OPEC+ output cut deal, as well as continued growth in global oil demand. However, in the Q4 2018, an unexpected USA waiver on Iran oil sanctions, coupled with reduced IMF GDP global forecasts including for China, placed strong downward pressure on prices.

The IEA expects world oil demand to rise for at least the next 20 years, on target for 125 mmbbl per day by around mid-century. How Middle East producers plan to meet this rising demand whilst also maintaining their immediate competitive edge on the global market and meeting sustainability targets - the region is expected to more than triple its share of renewable energy from 5.6 per cent in 2016 to 20.6 per cent in 2035 - will feature as major points of discussion at the Middle East Energy Summit.

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