Saudi Arabia will probably have to sustain production above 10 million barrels a day for the longest period in more than 30 years as it meets the summer surge in domestic demand and compensates for production losses in Libya.
The CHART OF THE DAY shows how, over the past half decade, Saudi Arabian crude oil burning for power generation expanded by an average of 500,000 barrels a day in the six months through August as people turned up their air conditioners. A repeat this year would eat up about 5 percent of the kingdom’s current output at a time when Libya, the holder of Africa’s largest oil reserves, is all but offline.
“The summer this year will pose the real challenge, particularly if most Libyan production remains offline,” Robin Mills, the head of consulting at Dubai-based Manaar Energy Consulting and Project Management, said in an interview. To meet both international and domestic crude demand, the kingdom would have to raise production above 10 million barrels a day and sustain it for several months, he said.
Saudi Arabia’s output has risen above 10 million barrels a day on four occasions since the Libyan unrest began in 2011, never for longer than three months, according to figures the country submitted to the Riyadh-based Joint Organizations Data Initiative. The kingdom has said repeatedly it can supply whatever oil its customers need and has the ability to pump as much as 12.5 million barrels a day.
The country produced 9.85 million barrels a day in February, 700,000 more than a year earlier, according to official data. Direct burn of crude oil in Saudi power plants was 20 percent higher in February than a year earlier at 353,000 barrels a day, the data show.