Global Oil Market - Aug 5

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Demand exceeds supply and risk to supply increases.

On August 4 Reuters reported Iranian Revolutionary Guards seized an Iraqi oil tanker in the Gulf which they said was smuggling fuel and detained seven crewmen, Iran's state media reported on Sunday, in a show of power amid heightened tension with the West. The vessel was intercepted near Iran's Farsi Island in the Gulf, Iran's semi-official Fars news agency said. The Revolutionary Guards Corps has a navy base on Farsi Island which is located north of the Strait of Hormuz. The state news agency IRNA, quoting the Guards, said it was an Iraqi ship that was seized on Wednesday night in the Gulf. Zirahi said it was carrying 700,000 litres of fuel, without elaborating on the nationalities of the detained crewmen.

On August 1 Reuters reported Venezuela's oil exports fell 17.5% in July to their second-lowest level since Washington imposed sanctions on the nation as state-run PDVSA finds fewer customers to take its oil, according to internal data from the company and Refinitiv Eikon.

On July 31 Reuters reported U.S. crude oil output declined 26,000 b/d in May to 12.1 million b/d, the U.S. Energy Information Administration said in a monthly report released on Wednesday. The agency also revised its estimate for April oil production down by 28,000 b/d.

Crude exports from the U.S. jumped to 2.9 million b/d in May, near the monthly record 3 million b/d hit in February. Total oil demand in the U.S. in May fell 98,000 b/d to 20.26 million b/d and distillate demand slumped 232,000 b/d to 4.04 million b/d. Gasoline demand declined 1.6%, or 149,000 b/d, to 9.4 million b/d, the data showed. EIA's weekly reports indicate a strong rebound in demand in June and July.

On July 30 Reuters reported Libya's Sharara oilfield, the country's largest, was shutting down on Tuesday after a valve on the pipeline linking it to the Zawiya oil terminal was shut, two sources with knowledge of the matter told Reuters. The exact geographical location of the valve on the pipeline was not immediately clear. The field, which produces 290,000 b/d, was shut down for a few days on July 19 after an unknown group blocked a valve on the pipeline to Zawiya in the Hamada area in western Libya.

On July 27 Reuters reported China's crude oil imports from Iran sank almost 60% in June from a year earlier, Chinese customs data showed on Saturday, following the end of a waiver on U.S. sanctions at the start of May. Crude shipments from Iran 208,205 b/d last month, data from the General Administration of Customs showed. That compared with 254,016 b/d in May.