Much has been discussed over recent months whether OPEC+ is increasing its production targets too quickly. The target for next month is 37.5mn b/d, up 2.3mn b/d from the April level. While quotas are set for output levels, what matters most for the market is exports. 

Vortexa data shows clearly that OPEC+ crude supplies to the market, that is exports, have been moving side-wards pretty much throughout this year. Only in preliminary data for September do we (finally) notice a 1mn b/d uptick to 25.1mn b/d, hitting the highest level since December 2020. 

What we do want to point out, however, is that there appears to be a massive rift in export dynamics between OPEC+ countries. On the one hand, kingpin Saudi Arabia and the United Arab Emirates have hiked exports by 1.9mn b/d over the past three months. This means that the two countries are already surpassing average 2018/2019 export levels by 300,000 b/d in September.

In sharp contrast, all other countries in the OPEC+ framework have seen their exports declining by about 1.4mn b/d since the turn of the year. Current export levels are furthermore barely up since the lows hit in Q3 last year. 

Taking a somewhat longer-term perspective uncovers a more drastic decline: combined exports from all OPEC+ countries except Saudi Arabia and the UAE have collapsed close to 7mn b/d since Q1 2018. It generally looks like these countries have just resumed their steady decline path established since late 2018, after a brief recovery late last year from a temporary Covid-19-induced trough in H2 2020. 

A powerful cocktail of a lack of investment, geopolitical hiccups and sanctions, the pandemic and the decarbonisation agenda, has evidently hit this key group of hydrocarbon producers very hard. 

OPEC+ crude exports (mn b/d)

What does this mean for Asian crude buyers? A look at import trends from OPEC+ countries reveals that less supply is coming from West Africa, North Africa, FSU supplies via Europe and Venezuelan barrels. Over Q3, only 14% of OPEC+ crude flows to Asia have come from the Atlantic Basin (incl West Africa), about 6% less than over 2019. The flip side of this is that Asia has become increasingly dependent on Middle Eastern supplies, apart from direct Russian Far East and local Asian (Malaysia, Brunei) supplies.

OPEC+ crude exports by origin region (mn b/d, %)

What is important to note is that the lack of supply from most OPEC+ countries has so far been easily handled by the market largely due to two reasons:

• Overall constrained demand amid the pandemic
• Substantially lower Chinese imports, with Q3 seeing little over 8.3mn b/d of seaborne crude imports, down by 2mn b/d from the heydays of May 2020 to Apr 2021

In both cases, dynamics are set to change soon, with November-December already having the potential for some upside in Chinese crude imports. Market forecasters are seeing 2022 oil demand some 3-4mn b/d higher than this year’s figures.

Dynamics in OPEC+ production and export paths are however unlikely to change much going forward; they could even deteriorate further in places like West Africa. And as highlighted above, Saudi Arabia and UAE are already exporting more in September than the average across 2018-2019. So we may be see much stronger competition for available barrels towards the end of this year and early next year, with some chances that crude oil could follow the path of natural gas and other commodities, at least to some extent. 

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