OPEC + Group Compliance Remains Intact Despite Dwindling US Market Share

OPEC President UAE Energy Minister Suhail al-Mazrouei (C) speaks as he sits with Minister of Energy of Russia Alexander Novak (left) and OPEC Secretary General Mohammed Sanusi Barkindo (r) of Nigeria during a meeting at the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) with OPEC members and non-OPEC members in Vienna, Austria on December 7, 2018. JOE KLAMAR / AFP
Updated 03 April 2019

OPEC + Group Compliance Remains Intact Despite Dwindling US Market Share

Riyadh, March 31, 2019 (Gulf Intelligence) – OPEC exports to the US are likely to continue trending downwards, according to the majority (88%) of energy executives polled in a Gulf Intelligence GIQ survey, ahead of the inaugural Gulf Intelligence Saudi Arabia Energy Forum in Riyadh on April 8th.

OPEC crude exports to the US fell to a 5-year low in January while US stockpiles climbed to 3.6 million barrels in February,according to the US Energy Information Administration (EIA). US production has increased a staggering 140% since 2008. Some analysts forecast that the country could be a net exporter of crude and refined products by as soon as 2020. US output hit 12 million b/d in February, contrary to previous expectations that this level would not be reached until the second half of the year.

Saudi Arabia, the largest oil producer within OPEC, has seen its crude exports to the US drop steadily over recent years, from 1.361 million b/d in 2012 to 949,000 b/d by 2017 and to about 500,000 b/d by the end of last year. The US has in fact been importing less crude oil altogether—not just less OPEC crude – from 262.8 million b/d per month at the start of 2017 to 226.6 million in October 2018—the last month for which there is data, according to the EIA.

Despite the loss of US market share however, OPEC and its coalition of non-OPEC producers, including Russia, havecontinued with their strong commitment to comply to the output cut deal agreed to in December - namely to trim production collectively by 1.2 million b/d through to at least June 2019. The agreement by the group of 25 producers,known as OPEC +, follows two years of cuts of 1.8 million b/d, which succeeded in reversing a 3-year oil price slide and restored a certain amount of stability to the market.

The strategy has continued to work, with Brent prices holding comfortably in the $60s/bbl range since the start of this year. On March 29, 2019 Brent closed at 68.39 USD/ bbl.

Compliance by the OPEC + coalition in February was almost 90%, up from 83% in January, according to the Joint Ministerial Monitoring Committee (JMMC). The JMMC convenes bimonthly to assess the impact production cuts are having on the market. At its last meeting in Baku on March 18th, it decided not to proceed with a full Ministerial Meeting that had been planned for April as market conditions were deemed stable.

“The job of OPEC and its allies is not done yet and the group of oil producers need to stay on course at least until June when the current global cut agreement is due to expire,” H.E. Khalid Al Falih, Minister of Energy, Industry and Mineral Resources, Saudi Arabia said in Baku last month.

The JMMC next meets in May ahead of the OPEC Conference meeting on 25 June in Vienna, during which a decision is expected to be taken on production targets for the second half of 2019.

Additional oil price support has come from US sanctions on Iran and Venezuela, two major OPEC producers who are currently exempt from the output cut deal. US restrictions on the Venezuelan energy industry have crippled the country’s oil exports, which dropped 40% in the first full month after sanctions were initiated in early February, removing 330,000 b/d of supply from the global market, according to Goldman Sachs. Iran’s exports meanwhile have hovered above 1 million b/d so far this year, having dropped in the past year from a level of 2.5 million in April 2018, a month before the U.S. decided to re-impose sanctions.

The Gulf Intelligence Saudi Arabia Energy Forum, under the patronage of His Excellency Al Falih, takes place at the King Abdullah Petroleum Studies and Research Center (KAPSARC), Riyadh, on April 8th and will gather industry leaders to deliberate the theme of Digital Transformation in the Energy Industry.


ALJ Motors unveils Toyota Granvia in Saudi Arabia

Updated 13 October 2019

ALJ Motors unveils Toyota Granvia in Saudi Arabia

Abdul Latif Jameel Motors, the authorized distributor of Toyota vehicles in Saudi Arabia, has unveiled the new Toyota Granvia in the Saudi market.

Designed to provide an exceptional transportation space that addresses the growing demand for high-end shuttles, the new vehicle’s design, interior, engine, and safety features enable the riders to travel with total peace of mind.

“We are very excited to unveil the new Granvia, a true premium transport solution that meets the evolving needs of those desiring a spacious cabin, unrivaled comfort, and superior refinement. By providing ample personal space, we have ensured that each passenger will enjoy a smooth, comfortable ride and arrive at their destination feeling relaxed and refreshed,” said Mazin Jameel, executive director, marketing, Abdul Latif Jameel Motors.

“At Abdul Latif Jameel Motors, we believe that travel should always be an enjoyable experience, and it was our goal to launch an exceptional Toyota vehicle that enhances people’s journeys by creating memorable moments to cherish. I would like to extend my gratitude to all of our guests for their continuous support, which is an endless source of inspiration in our drive to introduce ‘ever-better’ cars,” Jameel added.

The new Granvia takes the concept of a luxury shuttle to the next level with premium seating for up to six people, including a standard feature of four leather ottomans with footrests — a class first. Its expansive cabin delivers a level of comfort and refinement passengers would normally associate with a high-end limousine, complete with independent rear climate control, adjustable interior illumination, and luxurious woodgrain and metallic finishing, among many other features.

The relationship between Toyota and Abdul Latif Jameel Motors was established more than half-century ago, and has grown to become one of the most remarkable automotive forces in the Kingdom.

Abdul Latif Jameel Motors is also one of the largest independent certified Toyota distributors in the world. Under its principle of putting the guest first and its commitment to achieving excellence in all it has to offer, Abdul Latif Jameel Motors supports the widespread use of Toyota vehicles in the Saudi market through an extensive network of sales and maintenance centers strategically located around the Kingdom, providing peace of mind for their guests, wherever they may be.