The world’s top oil exporter, Saudi Arabia, is making good on its promise to flood the world with oil even as demand collapses, with a surge in tankers carrying Saudi crude to the United States, tanker-tracking data compiled by Bloomberg showed on Wednesday.
Last month, when Saudi Arabia pledged to flood the markets with oil, the Kingdom’s crude oil exports to the U.S. hit a one-year-high of 516,000 barrels per day (bpd), according to the data compiled by Bloomberg.
So far this month, at least seven supertankers carrying a total of 14 million barrels of oil are currently traveling to the U.S. Gulf Coast. This compares to just 2 million barrels of Saudi oil en route to America in the same period in March. Almost all tankers are chartered by the Saudi state-run shipping firm Bahri, according to the data compiled by Bloomberg.
Just after the collapse of the OPEC+ production cut deal in early March, Saudi Arabia’s Bahri was understood to have hired multiple very large crude carriers to carry all the extra oil that the Kingdom planned on exporting in April—a rare move indeed for the shipping company that sports its own fleet of 41 tankers.
The surge in Saudi oil exports coincides with a colossal demand loss around the world due to the coronavirus pandemic, and some analysts see global oil demand in April crashing by 30 percent, or by 30 million bpd, compared to the world’s typical levels of consumption.
While the major oil producers in the world are trying to forge a broader production cut deal, Saudi Arabia isn’t changing tactics - at least not this month; cargoes were scheduled weeks ahead, Fotios Katsoulas, Liquid Bulk Principal Analyst, Maritime & Trade, at IHS Markit, wrote this week.
According to IHS Markit Commodities at Sea, the Saudis are pressing ahead with more crude oil exports as promised.
“Saudi Arabia was exporting close to seven million barrels a day, but current activity stands above nine million barrels a day,” Katsoulas said.
The Kingdom is ready to further boost its exports, despite growing diplomatic pressure for a global deal, the analyst noted.
“At least 18 ballast VLCCs are currently positioned very close to Saudi Arabia's oil terminals of Ras Tanura and Yanbu, which could load around 36 million barrels in total,’’ according to IHS Markit Commodities at Sea.