The increase in oil output, which OPEC and non-OPEC oil producers agreed on, will mostly come from Saudi Arabia and its exports are likely to be from light crude, Energy Aspects said in a memo on Monday.
The energy market research consultancy also said the following:
- Gulf oil producers and Russia will increase production by 700,000 barrel per day (bpd) in the second half of 2018 compared to H1.
- Saudi Arabia and Russia will compensate for any further reductions in future supplies from other producers, adding up to another 400,000 bpd.
- Saudi Arabia’s output is likely to reach the average of 10.5 million bpd in Q3. The average in some months is expected to reach 10.6 million bpd.
- Russia's output will rise by 0.18 million bpd over H2 2018 compared to the first half, while the UAE and Kuwait will increase production by 50,000-60,000 bpd, each.
- New light crude oil projects and new oil refineries in Saudi Arabia will be operational, while Asia is refining heavy and medium materials, meaning that additional exports may be lighter than previously expected.
- The increase in Saudi output will come faster than the losses in Iranian production, which may indicate an oversupply in the short term.
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