SIMIC

 OPEC+ has cut its oil exports sharply in the first half of May, companies that track the shipments said, suggesting a strong start in complying with a new production cut agreement.

The Organization of the Petroleum Exporting Countries, Russia and other allies, a group known as OPEC+, are cutting supply by a record 9.7 million barrels per day from May 1 to offset a slump in prices and demand caused by the coronavirus outbreak.

Kpler, a company that tracks oil flows, said OPEC+ seaborne oil exports have declined by 6.3 million bpd over the past month towards 27 million bpd, calling the decline a “stunning reversal” from April when producers pumped at will.

Petro-Logistics, another tanker tracker, estimated the producers cut exports by 5.96 million bpd for the first 13 days of May compared to April averages – a “massive” decline, the company posted in a tweet.

According to Kpler, Saudi Arabia is showing the largest cutback. Saudi oil exports have averaged 7.26 million bpd, down 2.24 million bpd month on month. Russia is also making a large reduction of 922,000 bpd in May, Kpler said.

Kuwait and the United Arab Emirates have also reduced shipments significantly. The two countries have loaded a combined 4.25 million bpd onto ships for export, a drop of 1.26 million bpd month on month, Kpler said.

But Iraq has cut exports by 265,000 bpd, Kpler said, suggesting OPEC’s No. 2 producer needs to do more to deliver its pledged cut of 1.06 million bpd in full.

Refintiv Eikon data suggest a larger decline. Southern Iraq exports averaged 2.73 million bpd in the first two weeks of May, according to Refinitiv, a drop of more than 600,000 bpd from April.

But Nigeria, which like Iraq was a laggard in making its share of earlier OPEC+ cuts, apparently has yet to cut exports.

Nigerian crude exports averaged 1.82 million bpd in the first two weeks of May, Refinitiv data shows, steady from April.

The OPEC+ agreement applies to production, so exports do not provide the full picture on compliance, as withdrawals of crude from storage can boost exports temporarily.

OPEC pumped 30.25 million bpd in April, a Reuters survey found, and needs to lower output by 6.97 million bpd this month to comply with the new target.

Surveys of May compliance from Reuters and others will start to be published at the end of the month.