Saudi Arabia’s crude oil production rose to 8.94 million barrels per day (bpd) in July, marking a 1.26% increase from June, according to the Joint Organizations Data Initiative. Despite this rise, crude exports fell by 5.06% to 5.74 million bpd.
Domestic petroleum demand increased by 79,000 bpd, reaching 2.83 million bpd. During a virtual OPEC+ meeting, member countries reaffirmed their commitment to voluntary production cuts announced in April and November 2023, emphasizing adherence to these adjustments. The eight OPEC+ nations—Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—reaffirmed their commitment, with Iraq and Kazakhstan promising to follow their compensation schedules.
Refinery crude exports dropped by 17% to 1.13 million bpd. Diesel made up 43% of refined product exports, motor and aviation gasoline 30%, and fuel oil 8%. Notably, fuel oil shipments surged by 20% to 343,000 bpd. Saudi Arabia’s refinery oil products output in July was 2.46 million bpd, a 2% decrease from the previous month, with diesel accounting for 44%, motor and aviation gasoline 28%, and fuel oil 17%.
TechSci Research valued Saudi Arabia’s oil refining market at $27 billion in 2023, projecting a 4.7% compound annual growth rate through 2029. The refining sector is crucial to the Kingdom’s energy landscape, supported by significant investments to expand capacity and integrate advanced technologies. As global demand for refined products rises, Saudi Arabia is modernizing infrastructure and building new refineries to maintain its position as a leading global producer.
Direct Crude Usage
Saudi Arabia’s direct burn of crude oil rose by 211,000 bpd to 769,000 bpd, a 37.8% increase from the previous month. Year-over-year, this represents a 30% increase. This surge is likely driven by rising energy demands due to population growth and new arrivals in the country, highlighting increased domestic consumption and ongoing development in residential and business sectors.
To meet peak summer electricity demand, Saudi Arabia imported fuel oil from Kuwait in July for the first time in over two years. This move was necessitated by a decline in discounted fuel supplies from Russia, prompting the Kingdom to seek alternative sources to ensure a stable power supply during the hottest months.