After OPEC crude exports hit a record in June, ongoing strength in July seems to affirm a new trend, as opposed to a flash in the pan.
June's pre-OPEC meeting export ramp-up was pretty spectacular, propelling June's exports over 1.5 million barrels per day higher than May. And although we have seen exports drop back in July, they are still 900,000 bpd higher than the 2017 average, and 1.2mn bpd higher than the January-May 2018 average. A change in tack seems underway.
Saudi exports dropped back in July, but waterborne exports still remain around the 7mn bpd mark. Flows from the UAE and Kuwait also dropped versus June, but increases elsewhere - from sources such as Angola, Venezuela and Iran - have helped aggregate exports finish at the third highest level on our records. June is the highest (end of the production cut), while November 2016 is second (just before the start of the production cut).
Another interesting trend that jumped out in the July data was the stark change between Iranian and Iraqi crude flows to Northwest Europe. While both have averaged around 110,000 bpd through the first half of the year, Iranian flows bound for the region last month dropped off a cliff, while Iraqi flows have skyrocketed.
Iraq appears to be muscling in on Iran's share of the market before sanctions kick in: they are already eating their lunch.
As for what could upset the apple cart for ongoing elevated exports, the caveat comes courtesy of two 800-pound gorillas in the cartel: Venezuela and Iran. But for now, both of them are confounding expectations with higher exports.
For more color, ClipperData analyst Kanan Mehra breaks down July's OPEC flows in the video below, a topic which she drilled into in this week's global crude weekly report. Hark, click on the below (much improved versus the usual) mugshot to launch to the clip: