Is OPEC the other name of Saudi Arabia?

A meeting of Organization of Petroleum Exporting Countries (OPEC) is scheduled for 5th December 2019; the day Aramco is also due to announce the final offer price. The producers are expected to extend their supply pact at the meeting. It is anticipated that delegates may discuss deeper supply cuts amid forecasts of supply glut in 2020.

Analysts are pinning hopes on the meeting because oil prices slipped to US$63 a barrel after spiking to US$72 in the aftermath of 14th September 2019 attacks on Saudi oil facilities. The current price is below the levels many OPEC countries need to balance their budgets and below the levels officials say they favor.

OPEC, Russia and other allies, known as OPEC+, had agreed to reduce supply by 1.2 million bpd. OPEC’s share of the cut is about 800,000 bpd, to be shared by 11 members, except Iran, Libya and Venezuela.

United States the game spoiler

Voracious appetite for oil of United States has always been a strategic Achilles’ heel, with that vulnerability put on display to the world to during the 1973 Oil Crisis. A chronic hypersensitivity to oil supply crunches and price volatility helps US shape its foreign policy – it has been the driving force behind US partnership with the historic oil market maker Saudi Arabia. That is the reason the US Navy’s 5th Fleet patrols the critical choke points of the Gulf (the Strait of Hormuz), the Suez Canal and the Strait of Bab al Mandeb – the southern entrance to the Red Sea.

US has reached a record breaking 12.8 million barrels per day (bpd) of oil production in November in 2019 – a new high watermark for the industry. Earlier in September, US had achieved something yet more impressive when it exported more petroleum products than it imported. For the world’s leading oil buyer this is a big deal. America consumes over 20% of the global production of 99 million bpd of daily crude production, with China holding the number 2 spot at 13% and India in a distant 3rd at 5%.

Today the US leads the world in the production of petroleum products, including crude oil, petroleum liquids and biofuels with 17.9 million barrels per day, or 18% of the petroleum market. At present the US is ahead of Saudi Arabia, with 12.4 million bpd or 12% of the world's total output, and Russia producing 11.4 million bpd or 11% of the global market.

According to a Reuters report, oil output by OPEC fell in November mainly because Saudi Arabia kept a lid on supply to support the market before the initial public offering (IPO) of state owned Saudi Aramco. It was also supported by reduced production by Angola due to maintenance.

At an average, the 14-member OPEC pumped 29.57 million barrels per day (bpd) during November, down 110,000 bpd from October’s revised figure. Production from the two other exempt producers, Libya and Iran, was reported unchanged.

During November 2019, Saudi Arabia pumped 9.85 million bpd, down 50,000 bpd from October. Riyadh’s output had jumped by 850,000 bpd in October after the September attacks, but remained below its stipulated quota by OPEC. In November, the country pumped around 400,000 bpd less than the agreement allows.

OPEC’s largest production drop of 140,000 bpd was because Angola exported less crude in November due to maintenance. The African producer was already pumping far below its OPEC quota due to a natural decline in production and a lack of new fields coming online, rather than due to voluntary restraint.

The 11-OPEC members bound by the agreement, which for now runs until March 2020, have easily exceeded the pledged cuts. Compliance has been encouraging, although Iraq and Nigeria remain laggards among larger producers.

OPEC’s second-largest producer Iraq has pumped slightly less, but continues to overshoot its target.

Nigeria, which has consistently pumped more than its OPEC target, continued to do so in November, although output edged lower this month.

Among countries pumping more, the largest increase was in Kuwait, which increased output by 70,000 bpd to 2.72 million bpd, reaching its exact quota level.

Ecuador also pumped more after a decline in October, when protests against government austerity measures led to several fields being shut down.

Venezuela, which is contending with US sanctions imposed on state oil firm PDVSA and a long-term decline in output, managed a small boost to supply with exports increasing in November.

China the biggest buyer of Iranian oil

China, Tehran's largest oil client, has since late 2013 been stepping up purchases after a landmark November nuclear deal eased some sanctions on Iran and has been making up the main portion of stronger Asian imports since then.

China's Iranian crude imports rose by more than a third in May to the second highest on record, helping keep overall Asian buying above the level allowed under a deal that eases some Western sanctions, government and tanker-tracking data showed.

Iran's biggest buyers - China, India, Japan and South Korea - together bought 1.26 million barrels per day from the Islamic republic last month, up 8 percent from the same period a year ago, government and tanker-tracking data showed.

For the first five months of 2014, the aggregate imports averaged 1.25 million bpd, up 25.3 percent from a year ago, keeping Tehran's exports above one million bpd cap that it agreed under a deal with the West for six months to ending July 20, 2014.

There are no indications that Washington will loosen up on the cap until a full nuclear deal with Tehran is reached, but there have been some signs of improving ties, including on how to respond to an Islamist militant insurgency in northern Iraq.

There are concerns about unrest in Iraq that may disrupt oil supplies, but some importers consider Iranian supplies more stable than Iraqi crude.

Tough western sanctions since 2012 had slashed Iran's oil exports and crippled its economy by choking the flow of foreign exchange, but some of those measures were relaxed in November last year after a  diplomatic deal in return for Tehran curbing its nuclear activities and shipments have been up from last year.

Asian buying volumes have held consistently above 1.1 million bpd since January - excluding oil going to other destinations such as Turkey and Syria - indicating the six-month export target will be missed.

Iran's total crude loading also seem to have rebounded in May back up to about 1.38 million bpd, according to sources who track tanker loadings.

Iranian crude imports by China expanded 36 percent in May 2014 from a year ago to the second highest on record of 757,900 bpd, pushing up its average imports for January-May higher to nearly 50 percent on a year earlier.

India's imports fell 0.6 percent to 255,200 bpd in May from a year ago, but its intake in the first-five months of the year still was up 37.7 percent at 310,500 bpd.

South Korea's imports fell 43.3 percent from a year ago to 66,500 bpd of Iranian crude for the month. Shipments to Japan - the last of the four to report its oil intake - fell by 23.7 percent to 181,892 bpd last month.