Saudi Arabia’s crude oil exports slumped to a five-month low in May as local refineries used more supplies and some plants in China closed for maintenance.
The world’s biggest oil exporter shipped 6.94 million barrels a day in May, down from 7.74 million in April and the lowest since December, according to data published Sunday on the website of the Joint Organizations Data Initiative, or JODI. The drop in exports is more than Qatar produces in one month. New refineries in Saudi Arabia are leaving less crude available for overseas at a time when the market is in surplus.
Chinese refineries had almost 1 million barrels a day of capacity offline in May, almost twice the total in April, according to London-based Energy Aspects. Brent crude futures declined for the past two months as U.S. drillers added more rigs and OPEC production exceeded its monthly output target for more than a year.
“It’s very clear that if China sneezes, Saudi oil exports will get a cold,” Mohammed Ramady, professor of economics at King Fahad University for Petroleum and Minerals at Dhahran, Saudi Arabia, said by phone on Sunday. “The fall in Saudi crude exports in May illustrates the tight rope of opportunities facing major oil exporters with their dependence on a single market like China for sustaining their growth.”
Brent crude for September settlement dropped 0.1 percent to $57.04 a barrel by 10:06 a.m. in Dubai on the ICE Futures Europe exchange. Prices are down 0.5 percent this year.
Saudi refineries used 2.4 million barrels a day for their own operations in May, up from 2.2 million in April and the most since at least January 2002, according to JODI data. The amount of crude burned for power rose 89 percent. The nation is building refineries to diversify its economy and add more jobs. Refineries usually boost output in hotter summer months in the Middle East when air conditioning demand peaks.
“The numbers are alarming knowing that we are still in May and the summer demand will keep rising until August,” Ramady said. “This means that less crude will be available for exportation.”
Exports fell for a second month even with output at 10.33 million barrels a day, the most since at least 2002, according to JODI, which compiles data provided by oil-exporting countries.
Crude oil imports in China, the world’s biggest energy consumer, declined 11 percent in May from a year earlier, according to the Beijing-based Customs General Administration. Some of China’s stockpiling probably came to an end that month, according to Energy Aspects.
Shipments from Saudi Arabia, China’s biggest supplier in 2014, fell 18 percent over the same period to the lowest since August 2012.