OPEC+ Follows Through As Oil Market Tightening Is Underway
With July ending, OPEC+ crude exports came in lower m-o-m.
The drop was primarily fueled by Russia and Saudi.
Russia
Saudi
The supply cut was never in doubt. Although we do want to point out that the Saudi crude export drop to ~6.3 million b/d was far lower than we had expected. We had assumed crude exports to average ~5.8 to ~6 million b/d. The higher volume likely reflects some game the Saudis are playing that we are not aware of.
Nonetheless, we expect Saudis to maintain their cut for September. Our base case view is that the Saudis will at least keep the ~1 million b/d cut into November, but that calculus could change if oil prices continue to rise. Physical oil market is finally starting to tighten, but China's SPR release will be a good question mark.