DZWatch reports on the consistent drop in US oil imports from OPEC+ nations, including Saudi Arabia, and the implications this has on global oil prices and supply dynamics.
Recent data and market analysis reveal that the United States has been systematically reducing its seaborne crude oil imports from the Organization of Petroleum Exporting Countries (OPEC) and its allied nations, collectively known as OPEC+. Prominent among these OPEC+ nations is Saudi Arabia. The data indicates a steady decline in oil imports over the past year, which could have far-reaching consequences on global oil prices.
This reduction in US oil imports from OPEC+ has coincided with voluntary production cuts from OPEC, Saudi Arabia, and Russia that sum up to a whopping 1.3 million barrels per day (bpd) until the end of 2023. These cuts are causing concerns over tightening supply prospects and have fueled a surge in oil prices to over $90 per barrel by the end of September 2023.
Specifically, these voluntary production cuts have restricted the availability of certain types of crude oil, particularly sour crude, as colder weather approaches. This development gains more gravity as the Brent oil benchmark also underwent revisions at the beginning of this year, which could directly impact global oil prices.
According to data by Kpler, a data services company, the US is projected to import an average of 2.47 million bpd in October 2023, a decrease from 2.92 million bpd in September 2023. This dip involves imports from OPEC+ producers like Nigeria, Algeria, and Saudi Arabia.
Within this framework, Saudi oil exports to the US are expected to plunge to 241,000 bpd in October 2023, compared to 286,000 bpd in September 2023 and 410,000 bpd in October 2022. Industry analysts, including Matt Smith from Kpler, highlight that one reason for the reduction is Saudi Arabia’s pivot toward increasing crude exports to China. Kpler data shows Saudi oil exports to China escalated to nearly 1.6 million bpd in September 2023, up from 1.2 million bpd in August 2023 and 1.37 million bpd in July 2023.
Moreover, Rohit Rathod from Vortexa noted that refineries on the West Coast, including Chevron’s facility in Richmond, California, and others in the Los Angeles area, imported less Saudi crude in September 2023. These import patterns suggest that the US is also exporting less crude oil to Europe, with Kpler data showing a decline to 1.86 million bpd in September 2023 and 1.84 million bpd in August 2023, compared to 2.01 million bpd in July 2023.
The decrease in US oil imports doesn’t just signal a shift in US energy policy; it also flags significant changes in global oil dynamics. As the US lessens its dependency on OPEC+ oil, reverberations are felt across global supply chains, affecting everything from oil prices to geopolitical alignments. Given the potential implications on global oil prices and market stability, this development is crucial for market watchers and policy makers alike. Here at DZWatch, we’ll continue to monitor these trends closely, providing updates that help clarify the evolving landscape.
