Saudi Arabia cut crude exports from domestic terminals by 11pc last month compared with May as it set out to constrain production below its 8.49mn b/d Opec+ quota.
Argus tracking shows that shipments from the Ras Tanura, Ju'aymah and Yanbu terminals dropped to just under 5.6mn b/d in June. It marks a 39pc drop from the 9.22mn b/d exported in April, when Riyadh deployed its spare capacity in a short-lived battle for market share in the wake of the breakdown of the previous Opec+ output restraint agreement.
The Opec+ group's new two-year phased deal requires Saudi Arabia to keep production at 8.49mn b/d until August and 8.99mn b/d for the rest of the year. Saudi Arabia and its Mideast Gulf allies Kuwait and the UAE pledged to produce below their formal quotas in June, with Riyadh promising a 7.49mn b/d cap.
The pledge to produce 1mn b/d below quota at a time of seasonally higher domestic crude burn for power generation prompted state-controlled Saudi Aramco to reduce exports last month. The firm allocated some of its Asia-Pacific customers 20-30pc less than their June nominations, although at least four European buyers received the June-loading crude volumes they requested
There were no exports last month from the Neutral Zone, which Saudi Arabia shares with neighbouring Kuwait. The 300,000 b/d Khafji field — which only resumed output in February and exports in April — was shut down in June to help Saudi Arabia and Kuwait honour their additional production cut pledges. It was brought back online this month, alongside the Neutral Zone's 250,000 b/d Wafra field. Argus understands that production from Wafra did not exceed February test levels during the second quarter. The Neutral Zone shipped out 113,000 b/d in April and 127,000 b/d in May — this is likely to include some volumes produced in previous months.
Around 477,000 b/d of June-loaded Saudi crude is aboard vessels that have yet to declare a final destination. Saudi exports to Asia-Pacific account for 4.22mn b/d of the June loadings so far, down by 13pc on the month, with the region's main buyer China nearly halving its direct intake to 1.03mn b/d. Aramco allocated Chinese refiners only around 1.2mn b/d in June and 1.3mn b/d in July, Argus understands. Saudi shipments to Japan dropped by 14pc to 664,000 b/d in June, while exports to India were little changed at 533,000 b/d and those to South Korea rose by 22pc to 1.07mn b/d.
Shipments to destinations west of the Suez Canal declined by 35pc on the month to 867,000 b/d in June, the lowest since December. Direct deliveries to the Americas dropped by 66pc to a four-month low of 233,000 b/d, comprising 33,000 b/d to Canada and the rest to the US, while direct shipments to Europe increased to 67,000 b/d in June from just 13,000 b/d in May, all bound for the French port of Le Havre.
Most European buyers of Saudi crude, as well as some US refiners, purchase cargoes that load from storage at Sidi Kerir in Egypt at the Mediterranean end of the Sumed pipeline. Saudi crude reaches Sidi Kerir after being dropped off at the other end of the pipeline at the Red Sea port of Ain Sukhna. Discharges at Ain Sukhna fell by 12pc from May to a nine-month low of 567,000 b/d in June.