Saudi crude exports fall to their lowest levels since October 2011; the Joint Oil Data Initiative (JODI) reveals.
Exports by the Kingdom reached a three-year low in June of 2014 with just 6,946 million barrels per day (bpd), when compared with the 6,987m bpd exported in May.
Nonetheless, the data published by JODI shows that this figure didn’t have much to do with crude production, which actually increased over the summer from 9,705m bpd in May to 9,780m bpd in June. Moreover, industry sources suggest that production reached 10m bpd in July.
Instead, data shows that oil use for power generation within Saudi Arabia has surged, which has contributed to the decline in exports. Namely, oil provided the power sector with 827,000bpd in June, which was almost double the necessary amount only two months previously.
The key factor for this rise is that soaring summer temperatures spike demand for air conditioning in a country that, given the insufficient gas reserves, relies heavily on crude to satisfy its power needs.
Indeed, encouraging natural gas production is a strategy the world’s biggest energy supplier, Saudi Aramco, will focus on in years to come, according to its Chief Khalid Al Falih.
Speaking in Stavanger, Norway, this week, the CEO announced the company’s plans to invest $40 billion a year over the next decade to double gas production, while maintaining the country’s oil production capacity. “This will ensure that we efficiently meet the kingdom’s rising energy demand with gas for power and industry and refined products for transport, while also meeting the global call on our crude oil.”
Al Falih also noted that, in the absence of widespread investment in the energy sector, the industry would fall victim to rising costs and global turmoil. “At Saudi Aramco, project costs have roughly doubled over the last decade despite deploying cutting-edge technologies and applying our robust project management systems to mitigate cost escalation,” he said.
Wednesday, August 27- 2014 @ 17:48 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.