Saudi oil production continues to add pressure on prices

Exports of crude in October at highest level in four months.

Shaybah oilfield complex is seen at night in the Rub’ al-Khali desert, Saudi Arabia. Ali Jarekji / Reuters

Saudi Arabia boosted crude exports in October to the highest level in four months, as the world’s biggest oil exporter added barrels to a worldwide supply glut that has contributed to a slump in prices.

Saudi shipments rose to 7.364 million barrels per day in the month from 7.111 million bpd in September, according to the latest figures from the Joint Organisations Data Initiative (Jodi). The monthly exports were the most since June and 7 per cent higher than in October last year, the data released on Sunday showed.

Jodi is an industry group supervised by the Riyadh-based International Energy Forum.

Saudi Arabia produced 10.28 million bpd in October, up from 10.23 million in September, the Jodi figures showed.

Saudi Arabia led Opec to decide on December 4 to abandon the group’s limits on output amid efforts to squeeze higher-cost producers such as Russia and US shale drillers out of the market. Opec had set a production target almost without interruption since 1982, although member countries often ignored and pumped well above it. The oversupply has pushed the price of benchmark Brent crude to almost a seven-year low and triggered the worst slump in the energy industry since the 2008 global financial crisis.

Brent for February settlement dropped 18 cents, or 0.5 per cent, on Friday to US$36.88 a barrel on the London-based ICE Futures Europe exchange. The crude grade has tumbled 36 per cent this year.

Saudi Arabia pumped 10.33 million bpd in November, exceeding 10 million barrels in daily output for the ninth consecutive month, according to data compiled by Bloomberg. The Saudis have stuck to their one-year-old view that any output cuts won’t succeed in supporting prices unless big producers outside Opec, including Russia and Mexico, also participate.

Crude exports fell in October from Iraq and Kuwait, Opec’s second- and fourth-biggest producers, respectively, according to Jodi. Iraq shipped 2.708 million bpd, down from 3.052 million bpd in September for the country’s fourth consecutive monthly decline, the data showed. Kuwait’s exports dropped to 1.905 million bpd in October from 2.008 million in the previous month, Jodi said.

Iran, the fifth-biggest supplier in Opec, exported 1.395 million bpd of crude in October, a marginal increase from 1.39 million in September, Jodi figures showed.

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