QatarEnergy has set the contract price for Al-Shaheen oil cargo loading in July at its lowest level since April 2021. Despite the latest OPEC+ output cut, refinery profits remained low and oil supplies ample.
Qatar set the rate for July cargoes at a $1.03 per barrel premium over Dubai pricing. The price is down from about $2.37 per barrel the previous month. The company determined the price after the sale of five cargoes of July-loading Al-Shaheen petroleum.
Total, Shell, ExxonMobil, and Vitol are likely the buyers of the cargo. They are most likely paying between $0.8 and $1.07 a barrel more than Dubai pricing.
Also, the company stated that the July-loading Al-Shaheen had 19 cargoes ready for sale. In an average month, 15-16 cargoes are available for sale.
Output Cut Fails to Boost Oil Prices
The Organisation of Petroleum Exporting Countries (OPEC) and other parties have indicated that output will be reduced. The decrease will begin in May and continue through the rest of the year by an extra 1.16 million barrels. Qatar isn’t a member of the OPEC+ coalition.
Middle Eastern oil spot prices fell during the month as a result of Asia’s refineries’ low refining yields. Despite planned maintenance, several refineries, notably Taiwan’s Formosa, are planning to cut back on operations.
The al-Shaheen oil field is located off the northeast coast of Qatar. Furthermore, it is among the world’s largest oil fields. Its 100 million barrels per year account for 45% of Qatar’s total oil output.
Qatar and OPEC
In the midst of a GCC dispute, Qatar declared its exit from OPEC in December 2018. Neighbouring countries’ unlawful air, land, and sea blockade of Doha precipitated the dispute. The countries involved are Saudi Arabia, Bahrain, the United Arab Emirates, and Egypt.
After years of trading, Qatar formally exited the group of 15 oil-producing countries in January 2019. The pullout was largely perceived to be a direct reaction to the blockade. Officials, however, stated that the decision was to allow Qatar to expand and enhance its natural gas output.