How Saudi Arabia Caused The Worst Oil Price Crash In History
Saudi Arabia kept its promise to flood the market with oil after the collapse of the previous OPEC + deal in early March and exported a record 10.237 million barrels per day (bpd) in April 2020, compared to 7.391 million bpd in March Joint Organizations Data Initiative (JODI) showed.
Total oil exports from Saudi Arabia, including crude oil and total oil products, also increased in April - by 3.15 million bpd to 11.34 million bpd, mainly due to the increase in crude oil exports, according to the data The JODI database shows self-reported numbers from 114 countries.
Production of the world's largest crude oil exporter also rose to over 12 million bpd in April, according to the database to 12,007 million bpd.
After the de facto leader and largest producer of OPEC, Saudi Arabia, flooded the market with oil and contributed to the oil price crash in April, he voted in the same month for a new round of OPEC + cuts in response to the demand crash and the falling oil prices. Saudi Arabia had to reduce its oil production to 8.5 million bpd as part of the OPEC + deal in May and June in order to withdraw 9.7 million bpd of collective oil production from the market.
According to OPEC's secondary sources in the latest monthly oil market report (MOMR), Saudi Arabia cut its crude oil production to the required level of 8.5 million bpd in May.
The Saudis are now trying to reduce the inventory surplus in the United States and tighten the Asian market as demand recovery continues to be slow, while oil prices are still volatile and lower than the Kingdom considers comfortable for its household revenues.
Saudi Aramco is said to have reduced crude oil deliveries to at least five of its customers in Asia in July and significantly reduced crude oil exports to the US this month, with deliveries expected to reach a 35-year low.
By Tsvetana Paraskova for Oilprice.com
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