The daily volume sold by the kingdom to the US during April could be the highest for a year, the report said, citing a Saudi industry official familiar with allocations to American refiners.
An earlier report put Riyadh’s massive exports even higher. According to CNBC, Saudi shipments more than doubled from February to March (rising from 366,000 bpd to 829,540 bpd). Thus March shipments of crude reached 25 million barrels, the highest figure since December 2018.The report claimed that April’s figures were set further skyrocket, as in the first two weeks alone some 1.46 million bpd of Saudi oil were shipped to US ports. The Bloomberg report, however, suggests that Aramco was front-loading some of its April shipments, noting that the amount being shipped has since dropped.
Riyadh ramped up production to a record of over 12 million bpd, flooding the already sinking market with oil after it failed to find common ground on new output cuts with Moscow during the talks in early March. The collapse of the previous OPEC+ deal placed added pressure on oil prices that were already on a wild ride as the Covid-19 pandemic crippled global demand for crude.
The dire situation in the oil market forced major producers to hold emergency talks last week, resulting in a new historic deal. However, the planned 9.7 million bpd drop in global crude production does not come into effect until May.Although the boost in crude Saudi shipments in April does not violate the agreement, it comes against the backdrop of one of the biggest turmoils in oil market history.
There are still some concerns that OPEC’s efforts may not be enough to offset the supply glut triggered by the pandemic. Earlier this week, the International Energy Agency (IEA) warned the demand for crude could fall to the lowest for 25 years in April, possibly making it worst month ever for the industry.
“When we look back on 2020 we may well see that it was the worst year … April may well have been the worst month – it may go down as Black April,” IEA Executive Director Fatih Birol said, as cited by Reuters.