Baku, Azerbaijan, Oct.12
By Leman Zeynalova – Trend:
Saudi Arabia is unlikely to see the increased oil export from Iran and Iraq as an effort to take its market share, Christopher Haines, head of oil and gas at BMI Research, (a Fitch Group company) told Trend.
The expert believes that the rise in those countries’ crude export is a typical seasonal step.
“Domestic demand for oil will be falling due to reduced power demands as temperature drops, which frees up more oil for exports. Unlike Saudi Arabia, Iraq and Iran have less storage capacity for crude, so they have to export what they produce,” he added.
Saudi Arabia will likely be increasing domestic stockpiles to use at a later date, according to Haines.
“I do not think Saudi will see this as an effort to take market share and is unlikely to react to it. For now the most important factor is a stable oil price, and the markets are looking at Saudi Arabia to manage that, which it is doing,” added the expert.
Earlier, ship-tracking data compiled by Bloomberg showed that Iraq and Iran boosted crude exports in September, taking advantage of a slower pace of shipments from Saudi Arabia to win buyers in key markets like China and the US.
Iraq shipped 3.98 million barrels of crude a day, the highest since December, while Iran’s exports rose to 2.28 million barrels a day, the most since February. Saudi Arabia’s exports were 6.68 million barrels a day, the second-lowest for this year, the data show.
Iran’s oil output registered a tiny increase in September by 9,000 barrels per day month-on-month, and stood at 3.827 million barrels per day (mb/d), OPEC reported Oct. 11.
According to the report, Iran’s September oil output was 309,000 b/d more than the 2016 average and 991,000 b/d more than the 2015 output.
The Islamic Republic’s oil output was 3.848 mb/d in September, according to an OPEC report based on direct communications, indicating a 21,000-barrel difference between OPEC's estimates and Iran’s data.
On May 25, 2017, OPEC member countries and non-OPEC parties, Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, and the Republic of South Sudan agreed to extend the production adjustments for a further period of nine months, with effect from July 1, 2017.
The reductions will be on the same terms as those agreed in November.
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