Al-Shaheen’s 100 million barrels per annum comprise 45% of Qatar’s oil production.
QatarEnergy anchored the term price for Al-Shaheen oil cargoes loading in July at the lowest point since April 2021, as refinery margins remained weak and crude supplies were plentiful despite another OPEC+ output cut.
Qatar determined the price for July cargoes at a premium of about $1.03 per barrel over Dubai prices, a decrease from the previous month’s premium of nearly $2.37 per barrel, trading sources said on Thursday, as reported by Reuters.
The term price was selected after five cargoes of July-loading Al-Shaheen petroleum were sold through a spot tender that ended earlier this week.
Total, Shell, ExxonMobil, and Vitol are likely the winners of the cargoes, paying between 80 cents and $1.07 more per barrel than Dubai rates, according to trading sources.
They said that there are 19 cargoes of the July-loading Al-Shaheen available for trade, as opposed to 15–16 cargoes in a typical month.
The Organisation of Petroleum Exporting Countries (OPEC) and other parties declared they will reduce production from May through to the remainder of the year by an additional 1.16 million barrels.
Qatar is not a member of the OPEC+ alliance.
Spot prices for Middle Eastern oil decreased this month as a result of Asia’s refineries’ narrow refining margins. Despite scheduled maintenance, some refiners, including Taiwan’s Formosa, are looking to reduce operations.
The oil field Al-Shaheen, situated off the north east coast of Qatar, is one of the largest of its kind in the world. Its 100 million barrels per annum comprise 45% of Qatar’s oil production.
Qatar and OPEC
Qatar announced its withdrawal from OPEC in December 2018 amid a GCC crisis that was triggered by an illegal air, land and sea blockade on Doha by its neighbouring Saudi Arabia, Bahrain, the United Arab Emirates and Egypt.
By January 2019, Qatar formally left the bloc of 15 oil-producing countries after decades of trade.
While the withdrawal was widely seen as a direct response to the blockade, officials said the decision was made in order to allow Qatar to develop and increase its natural gas production.
Currently, Qatar is moving towards becoming the largest LNG producer by 2030 through its $28.7 billion North Field Expansion project – the biggest such project in the world.
This is set to raise Qatar’s LNG production capacity from 77 million metric tonnes per year to 110 million metric tonnes per year by 2025.