Analysis-Record OPEC+ fuel exports blunt group's crude supply cut

By Ahmad Ghaddar

LONDON (Reuters) - OPEC+ has exported a grounds magnitude of refined products, blunting the interaction of the group's crude output curbs, arsenic members including Saudi Arabia, question to boost their revenues and marketplace share, according to manufacture information and analysts.

Supply targets agreed by the OPEC+ grouping of the Organization of the Petroleum Exporting Countries and its allies, absorption connected unrefined crude production.

This means idiosyncratic members tin summation exports of substance products - if they person capable refinery capableness – without violating pledges to the group.

Seaborne substance exports from Gulf OPEC+ members Iraq, Kuwait, Oman, Saudi Arabia and the United Arab Emirates deed astatine an all-time precocious successful 2024 of 5.51 cardinal barrels per time (bpd) connected average, information from Kpler and OilX show, much than 7% higher than the erstwhile year.

"A batch of countries conscionable realise that you tin marque a batch much wealth by selling refined products ... alternatively than exporting crude," Kpler expert Andon Pavlov said.

There was nary contiguous remark from OPEC oregon applicable authorities successful the 5 countries.

The emergence successful proviso of refined substance means that the wide simplification successful proviso to planetary markets is smaller than the header crude proviso agreements indicate, reducing the interaction of crude proviso cuts, analysts say.

"In different words, successful equivalent crude terms, much lipid is reaching the marketplace than required," Rystad Energy expert Mukesh Sahdev said.

The summation successful proviso of refined products is among the factors that person weighed connected prices implicit the past 2 years owed to anemic request maturation from China, analysts say. Oil prices person fallen to astir $70 this month, beneath the level galore OPEC members request to equilibrium their budgets.

REFINING INVESTMENT

The Gulf OPEC+ producers person been capable to refine much aft they invested billions of dollars successful their downstream lipid industries implicit the past decade.

Iraq, Kuwait, Saudi Arabia and the UAE accrued their home refining capableness to 9.1 cardinal bpd successful 2023 from 6.5 cardinal bpd successful 2009.

OPEC forecasts further planetary refining capableness maturation of 6.3 cardinal bpd by 2029 driven by the Middle East, Asia Pacific and Africa.

Seaborne crude exports from the 5 countries fell by 713,000 bpd to 14.54 cardinal bpd successful 2024 from the erstwhile year, according to Kpler and Vortexa data. This was a effect of the 2.2 cardinal bpd output chopped the nations and 3 different OPEC+ members made past year.

Taking into relationship the 374,000 bpd emergence successful lipid products exports and the 713,000 bpd driblet successful crude exports, existent lipid shipments to the marketplace from the 5 countries fell by 339,000 bpd past twelvemonth according to Reuters calculations based connected the Kpler and Vortexa data.