Saudi Oil Exports Fall to 6-Month Low as Refineries Buy Less

Is Oil Running Out of Steam?
  • Crude shipments dropped to 7.44 million barrels a day in April
  • Qatar’s oil exports declined to lowest since at least 2002

Saudi Arabia, the world’s biggest crude exporter, cut shipments in April to the lowest level in six months as overseas refineries bought less due to seasonal maintenance and the kingdom burned more oil at home to power air conditioners.

Shipments dropped to 7.44 million barrels a day from 7.54 million barrels a day in March, and to the lowest since 7.36 million in October, according to data released Monday by the Joint Organisations Data Initiative in Riyadh. Exports also declined for Qatar, whose shipments slid to the lowest since at least 2002, as well as for fellow OPEC members Iraq and Kuwait, the data show.

Oil companies typically shut refineries for maintenance in April and May in preparation for increased summer demand. Saudi Arabia is planning to boost crude production to 10.5 million barrels a day in the next few months as higher summer temperatures boost demand for electricity needed to cool homes and offices, a person with knowledge of Saudi output policy said in April. The country’s output was 10.26 million barrels a day in April after reaching a record 10.56 million in June 2015, according to Jodi.

Refinery Turnarounds

“We have a refinery turnaround season going on,” Mohamed Ramady, a London-based independent analyst, said by phone. Also, “we had an uptick in local consumption of crude for power,” he said. 

Saudi Arabia burned 501,000 barrels a day of oil for electricity in April compared with 397,000 barrels a day in March, according to JODI.

Qatar’s oil exports, which fell to 427,000 barrels a day in April from 506,000 barrels in March, were the lowest since JODI started compiling data in January 2002. Iraq’s shipments dropped to 3.36 million barrels a day from 3.81 million in March, while Kuwait’s exports declined to 2.03 million in April from 2.2 million, the data show. Export data on the JODI website wasn’t updated for five of the 13 members of the Organization of Petroleum Exporting Countries: Iran, the United Arab Emirates, Indonesia, Libya and Venezuela.

Crude Storage

The amount of Saudi crude in domestic and overseas storage facilities declined in April for the sixth consecutive month, JODI data showed. Stockpiles fell to 290.9 million barrels from 296.7 million barrels in March, and to the lowest level since August 2014 when the country had 285.6 million barrels in storage, according to the data. 

The drop in inventories resulted from an increase in Saudi sales in the spot market, Ramady said. Saudi Arabian Oil Co., the state-run producer known as Saudi Aramco, may be changing its strategy in Asia to boost its market share by selling more spot cargoes to small, independent refiners in China from its storage in Okinawa, Citigroup Inc. said in April.

Saudi Aramco said last month that it has expanded its geographical sales area and opened new markets in the Baltic Sea region of northern Europe. Aramco has also “enhanced its role as a supplier" by selling more spot crude to customers in Asia and Europe last year from storage facilities in Okinawa and Rotterdam, the company said in an annual review posted on its website.

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