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Saudi Oil Exports Record 5-Month Low in April

The Ras Tanura port. (Aramco)
The Ras Tanura port. (Aramco)
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Saudi Oil Exports Record 5-Month Low in April

The Ras Tanura port. (Aramco)
The Ras Tanura port. (Aramco)

The Joint Organizations Data Initiative (JODI) data showed Monday that Saudi Arabia's crude oil exports fell in April to their lowest level in five months.

The Kingdom's exports fell three percent to 7.316 million barrels per day (bpd) from 7.523 million bpd in March.

Riyadh and other members of the Organization of the Petroleum Exporting Countries (OPEC) provide monthly export figures to JODI, which publishes them on its website.

Saudi crude production was stable at 10.46 million bpd in April, while inventories rose by 1.98 million barrels to 149.4 million.

Domestic refineries refined 2.69 million bpd, down 42,000 bpd despite an increase in refined product exports by 75,000 barrels per day to 1.547 million bpd.

Saudi Arabia pledged this month to make a significant production cut in July, on top of a broader OPEC+ deal to limit supply in 2024, and raised the prices of its Arab Light crude oil to Asian buyers in July to a six-month high.

As a result, Asian refiners will likely buy less Saudi oil in July than more cargoes, such as those from the UAE, in spot deals.

Meanwhile, the oil prices fell as questions over China's economy overweighed OPEC+ output cuts and the seventh drop in the number of oil and gas rigs in the US.

Several large banks cut their forecast for China's GDP 2023 growth after May data published last week showed that the post-Covid-19 recovery in the world's second-largest economy was faltering.

However, China's refinery consumption rose in May to the second-highest level on record, helping to boost last week's gains.

US energy companies reduced the number of operating oil and natural gas rigs for the seventh week in a row for the first time since July 2020.

The number of oil and gas rigs, an early indicator of future output, fell by 8 to 687 in the week ending June 16, the lowest level since April 2022.

Meanwhile, Brent crude settled down 48 cents, or 0.6 percent, to $76.13 a barrel, while US West Texas Intermediate (WTI) crude was down 49 cents, or 0.7 percent, to $71.29. Trading volumes were thin due to a US holiday.

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Oil Extends Climb on Supply Fears, Trade War Concerns Cap Gains

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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20
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Oil Extends Climb on Supply Fears, Trade War Concerns Cap Gains

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices inched higher on Tuesday after threats by US President Donald Trump to impose secondary tariffs on Russian crude and attack Iran, though worries about the impact of a trade war on global growth capped gains.

Brent futures rose 21 cents, or 0.3%, to $74.98 a barrel at 0645 GMT, while US West Texas Intermediate crude futures climbed 22 cents, or 0.3%, to $71.70.

The contracts settled at five-week highs a day earlier.

"Near-term risks are skewed to the upside, with US threats of secondary tariffs on Russian and Iranian oil leading market participants to price for the risks of tighter oil supplies," said Yeap Jun Rong, market strategist at IG, Reuters reported.

However, broader themes still revolve around concerns of upcoming tariffs weighing on global demand, along with prospects of increased supply from OPEC+ and the US, said Yeap.

A Reuters poll of 49 economists and analysts in March projected that oil prices would remain under pressure this year from US tariffs and economic slowdowns in India and China, while OPEC+ increases supply.

Slower global growth would dent fuel demand, which might offset any reduction in supply due to Trump's threats.

After news of Trump's threats initially boosted prices on Monday, traders told Reuters they viewed the president's warnings to Russia, at least, as a bluff.

Trump, on Sunday, told NBC News that he was very angry with Russian President Vladimir Putin and would impose secondary tariffs of 25% to 50% on Russian oil buyers if Moscow tries to block efforts to end the war in Ukraine.

Tariffs on buyers of oil from Russia, the world's second largest oil exporter, would disrupt global supply and hurt Moscow's biggest customers, China and India.

Trump also threatened Iran with similar tariffs and bombings if Tehran did not reach an agreement with the White House over its nuclear program.

"For now, it appears to be just a threat to Russia and Iran. However, if it becomes a reality, it creates plenty of upside risk to the market given the significant oil export volumes from both countries," said ING commodities strategists on Tuesday.

The market will be watching for weekly inventory data from US industry group the American Petroleum Institute later on Tuesday, ahead of official statistics from the Energy Information Administration on Wednesday.

Five analysts surveyed by Reuters estimated on average that US crude inventories fell by about 2.1 million barrels in the week to March 28.