USO•USO•Middle East crude exports exceeded their pre-war average of 18 million barrels per day for much of the week ending October 3, while the global supply deficit is expected to narrow to 250,000 bpd in October from almost 4 million bpd in May. Gulf producers are ramping up exports as they compete to regain customers, but Brent remains above $100 a barrel.
Crude exports through the Strait of Hormuz averaged 12 million barrels per day over the past two weeks, around 80% of pre-war levels. Combined with shipments through alternative routes, Middle East crude exports exceeded the pre-war average of 18 million bpd for much of the week ending October 3. Brent prices remained above $100 a barrel, around 40% above pre-war levels, as Iranian forces continued to target vessels and shipping and insurance costs stayed high.
Combined crude production in Saudi Arabia, the UAE, Iraq and Kuwait is expected to average 17.3 million bpd in October, compared with about 21 million bpd in the six months before the war. UAE exports have averaged 3.3 million bpd since June, broadly matching pre-war levels; Saudi exports averaged about 7.3 million bpd over the past three weeks. Saudi production is expected to average 7.4 million bpd in October, while CEO Amin Nasser said the kingdom could raise output to 12 million bpd within days if needed.
Saudi Arabia's share of Asian crude imports fell from 24% in February to 9% in September and is expected to recover to around 14% in October. Iran's share dropped from 6% in March to zero in October after a U.S. naval blockade on its exports. Some Gulf producers, including Iraq and Saudi Arabia, have offered deep discounts to buyers loading cargoes inside the Gulf, but the column says pump prices are unlikely to fall dramatically while Hormuz remains risky and expensive to navigate.
