Middle East crude exports lift Pacific Basin supplies above Atlantic Basin in November
Preliminary indications for November show rising crude exports from the Pacific Basin, especially the Middle East. Should the current trajectory continue to the end of the month, Pacific Basin exports will overtake those from the Atlantic Basin, for the first time since February 2023.
Global crude/condensate loadings (excluding Iran and Venezuela) are up so far in November (days 1-15) by around 700kbd versus full month October totals, but the trends for exports loaded from Pacific versus Atlantic Basin are diverging.
Pacific Basin exports have been climbing since September, and in November have overtaken those from the Atlantic Basin (see chart above).
The switch in positions between the two basins is driven by higher exports in the first few days of the month especially from the Middle East with some key locations in the UAE and Saudi Arabia driving activity this month (see chart below).
Part of this increase from the Middle East is due to skewed loading activity for November in the first half of the month. We observe higher loadings from the UAE particularly in the first few days of November, but that is offset somewhat by weaker loadings from the country in the second half of October. We also see higher loadings so far this month from the Saudi Arabia’s Ras Tanura.
Looking ahead, there are reasons to believe that exports from the Middle East region will remain firm or even climb. Vortexa Voyage Dynamics data shows rising numbers of ballast VLCCs have been arriving into Saudi ports in the first half of November, suggesting higher crude loading activity.
This also potentially fits with recent news from Saudi Arabia on its December OSPs, which have been priced lower than market expectations. This could suggest more crude is available to export in the spot market, especially given that Saudi Arabia’s 400kbd Yasref refinery is in maintenance this month (Argus Media). On top of this, Kuwait’s 650kbd Al Zour refinery is also undergoing a major turnaround in December (Argus Media), which could support Kuwaiti crude exports.
Aside from the impact of refinery maintenance, another (and potentially bigger) question for Middle East crude exports in the coming weeks is whether or not there will be any change in the approach by OPEC+ to lifting existing production cuts? The decision to bring back production levels has been pushed successively for months and given that there are little-to-no bullish demand signs from China, added supply could apply even more pressure on prices. However after ceding market share to non-OPEC+ producers for so long, maybe the growing pessimism on China and (to a wider extent) global demand growth could be prompting a change in direction.
