Saudi Arabia’s oil production has been at a record high this month—at between 11.1 million bpd and 11.3 million bpd in some days in November, an industry source familiar with the output told Reuters on Monday, but whether the Saudis pumped an all-time average monthly high will be known once November ends.
While the Kingdom has been pumping in record amounts, U.S. President Donald Trump had been using Twitter this month first to express hope that Saudi Arabia and OPEC won’t cut production to prop up oil prices, then to thank Saudi Arabia for the lower oil prices, and most recently, to thank himself for the falling oil prices in a tweet on Sunday.
The Saudis, together with the leader of the non-OPEC nations part of the production cut deal—Russia, started to increase oil production in June to offset what the market expected to be a drop-off of Iranian oil supply once the U.S. sanctions return.
Saudi Arabia’s crude oil exports hit their highest in 20 months in September, according to data by the Joint Organisations Data Initiative (JODI) database, which collects self-reported oil figures from 114 countries. The Kingdom’s production in early November appears to have hit the highest on record, on the back of high customer requests made in early October when the market feared a hefty loss of Iranian supply this month, industry executives tracking Saudi output told Bloomberg last week.
Russia’s oil production set a new post-Soviet record high of 11.41 million bpd in October, up from 11.36 million bpd in September.
As U.S. sanctions on Iran returned in early November, with waivers for eight key Iranian oil customers, the market was gripped by fears of oversupply and slowing global economy and oil demand growth, sending oil prices into a bear market.
Oil prices are now more than 25 percent off their four-year high from early October, with WTI Crude holding just above $50 and Brent Crude barely clinging onto $60 early on Monday.
OPEC is widely expected to announce a new production cut at its meeting next week. Yet, the U.S.-Saudi relations—with President Trump standing by Saudi Arabia and Crown Prince Mohammed bin Salman amid the global backlash over the killing of Jamal Khashoggi—may complicate Saudi Arabia’s decision to lead a decisive and sizeable OPEC production cut, according to Saudi watchers quoted by Reuters.
By Tsvetana Paraskova for Oilprice.com
