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MEOG                                         COMMENTARY                                               MEOG








































                         came back on stream. Bloomberg estimated  had flowed at 6.1mn bpd during September, up
                         that production grew by an average of 70,000-  from 6mn bpd in August despite flows to China
                         150,000 bpd during September, reaching a  dropping to 1.3mn bpd, their lowest level since
                         month-end level of 300,000 bpd.      June. It has been a remarkable year for Saudi oil
                           Iran has also defied the odds, ramping up pro-  production, which hit an all-time single day high
                         duction with domestic companies taking charge  of 12.1mn bpd on April 2, but fell to around 7mn
                         of major fields throughout the country and  bpd during Q2 as the coronavirus (COVID-19)
                         exports continuing to flow, despite sanctions.  pandemic took hold of market fundamentals.
                         Key to this appears to have been the admission   This increased to 8.988mn bpd in August
                         by the Ministry of Petroleum (MoP) that it had  and 8.974mn bpd in September, according to
                         sought to obfuscate the origin of cargoes, with  an industry official spoken to by Bloomberg this
                         Oil Minister Bijan Zanganeh noting that “what-  week. The Kingdom’s reduced quota is set at a
                         ever [Iran] export[s] is not under Iran’s name”  little under 9mn bpd.
                         and supporting “any proposal for selling Iranian   Some demand has returned since mid-year,
                         crude”. During the month, Iran increased output  but ahead of the next OPEC+ meeting in less
                         by 120,000 bpd, while its exports were reported  than two weeks, it appears that the recovery
                         by TankerTrackers to have doubled to 1.5mn  could prove to have been insufficient for mem-
                         bpd.                                 bers to stick to the current plan to begin ramping
                           Meanwhile, OPEC+ kingpin Saudi Arabia  production back up at the turn of the year.
                         cut its official selling prices (OSPs) to Asia and   The market remains in a state of fragility, but
                         increased its crude exports by 100,000 bpd as  for all Saudi Arabia’s stern tone with compli-
                         sales to India and South Korea made up for weak  ance laggards, it remains to be seen if any action
                         Chinese demand.                      can be taken to ensure improved alignment on
                           Bloomberg reported this week that exports  output.™























       Week 40   07•October•2020                www. NEWSBASE .com                                              P5
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