Repeat After Me, This Is Not A Real OPEC+ Cut
It has been 4 months since the announcement of the OPEC+ voluntary production cuts and since then, compliance is virtually nonexistent. We've written about this numerous times. Here are the article links:
Just How Real Is The Saudi Cut?
Asking For A Friend, Does The OPEC+ Production Cut Really Matter?
But with April coming to a close, you start to wonder just how real the production cuts are...
Looking at Kpler's month-to-date data, the m-o-m drop is ~800, but when you dig a bit deeper, the entirety of the drop comes from lower crude exports from Iran and Venezuela. Both are under sanctions from the US, so there are shadow fleets that are not being accurately tracked. If we adjust it for the shadow fleets, we have OPEC+ crude exports higher m-o-m.
Since the Saudis and Russians maintained their production cuts from 2023 to 2024, the additional voluntary production cuts from the other OPEC+ members should have shown up. Instead, overall crude export volumes are flat.
In December 2023, crude exports from Iraq, Oman, UAE, Kuwait, and Algeria averaged 9.24 million b/d. The year-to-date average? It's 9.08 million b/d.
So let me ask you, where is the voluntary production cut?
Again, aside from the Saudis, we believe that the voluntary production cut from the others is not real. Only the Saudis are visibly reducing supplies, while Russia continues to export near all-time highs.
Russian crude export Q4 2023 - 4.839 million b/d
YTD - 5.082 million b/d
At some point, the market will realize what we are saying is right and as for the market implications, this is important to understand.