Global crude and condensate flows fell by 2 Mbd m/m and settled at a 1-year low in June, with a rise in global crude demand and supply disruptions across several countries keeping a lid on crude availability.

June saw global crude and condensate exports come increasingly under pressure, with seaborne flows easing by around 2 Mbd m/m and settling at a two-year low of only 40.6 Mbd (see chart below). Downward pressure has been coming largely from a few countries, including the US, Saudi Arabia, and Russia.  

The latter three countries have seen a strong decline in crude flows in June, largely due to a ramp-up in domestic demand, although exports from Russia have also partly been impacted by maintenance at Primorsk on the Baltic Sea and Kozmino on the Pacific coast, where departures remained offline for several days in mid-June. This has been keeping Russian crude flows some 300 kbd below the levels observed between March-May 2024, with Ukrainian drone attacks and stronger refinery maintenance keeping crude exports supported at the time.  

Global crude and condensate exports by country, Mbd

Source: Kpler

Nevertheless, the largest decline in crude exports has been observed from Saudi Arabia, where a combination of rising domestic crude demand and robust crude burning has kept a lid on crude availability. In fact, crude and condensate exports from the kingdom averaged only 5.3 Mbd in June, which represents a decline of 800 kbd m/m and marks a multi-month low. The rise in crude demand can be largely attributed to a recent resumption of the 300 kbd Sasref refinery, which completed two-month maintenance in mid-June, with crude burning coming in at 550 kbd last month, which is equivalent to an increase of almost 100 kbd versus the levels observed in May.  

The rise in crude throughput is a trend we have observed for other Middle Eastern producers, such as Iraq and Kuwait, too. This has come at the expense of European refiners, with Middle Eastern crude flows to Europe falling by 150 kbd m/m to only 700 kbd in June, which has kept European sweet-sour spreads wider. In fact, medium-density grades such as Johan Sverdrup have benefited strongly from a decline in competing grades from the Middle East, with the European medium-sour benchmark remaining at a stronger premium of around $1.50-2/bbl versus North Sea Dated over the last month (see chart below).  

Regional sweet-sour spreads, $/bbl

Source: Argus Media

On a similar note, European medium-density crude differentials have also benefited from a decline in heavier crude flows from Latam, particularly from Brazil, where output from the Tupi field has fallen by 200-300 kbd last month due to technical issues at two FPSOs. Crude supply from the field is expected to remain pressured this month as well, with production returning to normal levels by August. Considering this, Brazil’s crude and condensate supply has been averaging 3.1 Mbd, down some 300-400 kbd versus year-ago levels.  

This is coming at a time when Ecuador’s force majeure on Napo exports, as well as Mexico’s export cut, has been keeping flows from these countries pressured, too. It should be noted, however, that a return to full production capacity in the former, and delays at the Dos Bocas refinery in the latter, will provide upwards support for crude exports next month and the remainder of Q3. Similarly, whilst Iranian crude exports averaged almost 1.3 Mbd in June, according to the latest data, which represents a decline of some 300 kbd m/m, these figures are likely to be revised upwards over the coming weeks as data/AIS signals become available.  

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