Saudi Arabia’s crude exports fell to an 11-month low in July

Saudi Arabia exported 5.74 million barrels per day (bpd) of crude oil in July, down 306,000 bpd from June and the lowest level of exports since August 2023, the latest Joint Organizations Data showed on Thursday Initiatives (TODAY).

Saudi Arabia, the world’s largest crude oil exporter, typically cuts its crude oil exports during the summer as it uses more crude domestically for direct burning at power plants. Demand for electricity in the desert during the summer months is on the rise amid scorching temperatures.

Saudi Arabia saw direct crude use rise by 211,000 bpd in July to 770,000 bpd, a seven-month high, according to JODI data, which compiles self-reported figures from individual countries.

Saudi Arabia’s crude output rose by 111,000 bpd to 8.94 million bpd in July. Despite the increase in production, exports fell, suggesting that the growth was consumed by the direct use of crude oil for power generation.

Even with July’s increase in crude output, Saudi Arabia met its commitment to keep production “at about 9 million bpd,” as it said when it announced its voluntary cut of 1 million bpd on top of its quota reduction, as part of the OPEC+ Agreement.

Going forward, Saudi Arabia is looking to attract more customers in Asia, where demand has fallen so far this year.

In early September, the Kingdom cut its official selling prices (OSP) for October to Asia amid worsening refining margins in China and the wider Asian region and weaker reference prices in Dubai.

The price of Saudi Arabia’s flagship Arab Light grade to Asia for October was reduced by $0.70 per barrel compared to the September price.

As a result, demand from China’s largest refiners rose, while nominations from large private refiners with import quota allocations remained flat for the month ahead.

By Charles Kennedy for Oilprice.com

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