Saudi Arabia Increases Crude Exports

Top oil exporter Saudi Arabia increased its crude exports in June as it pumped at near-record-high levels while burning less petroleum for electricity than the same month last year, official data released on Thursday showed.

Crude exports in June rose to 7.456 million barrels a day, the highest for the month of June since 2012, compared with 7.295 million barrels in May, according to figures provided by the kingdom to the Joint Organisations Data Initiative.

The country’s new energy minister, Khalid al-Falih, pledged in June that Riyadh had no intention of flooding the market but, since then, its production has increased at a rate faster than it needs to meet domestic demand in the summer months.

Saudi Arabia produced 10.550 million barrels in June, up from 10.270 million barrels a day in May, JODI data shows.

It told the Organization of the Petroleum Exporting Countries that it boosted its oil output to a record high of 10.67 million barrels a day in July, in a sign that it remains focused on market share rather than cutting output to tackle the current supply glut.

Mr. Falih said in a statement last week that the record high output was in part to meet higher demand from the kingdom’s customers.

“Despite the bearish sentiment engulfing the market, we still see strong demand for our crude in most parts of the world, especially as supply outside OPEC has been declining fast, supply outages increasing, and global demand still showing signs of strength,” he said.

JODI data appeared to show that Saudi Arabia has made some progress in reducing its reliance on crude oil for electricity, allowing it to send more oil abroad as the kingdom competes to keep a healthy share of the global market.

The kingdom burned 704,000 barrels a day in June for electricity, up from 660,000 barrels a day a month earlier, but almost 200,000 barrels a day less than the same period a year ago as it brought more natural gas production on stream.

Domestic refineries processed 2.381 million barrels a day in June, up from 2.379 million in May, while exports of refined oil products rose to 1.371 million barrels a day versus 1.361 million barrels during the same period.

The kingdom has been using more crude in its domestic refineries as part of its drive to diversify its economy and increase its share of the global crude and petroleum products markets.

The state-oil giant Saudi Aramco also plans to increase its refining capacity to between 8 million to 10 million barrels a day, from its current capacity of about 5.4 million barrels a day. The expansion is part of Aramco’s plan to be the world’s leading energy-chemicals company by 2020 and represents the future of its fossil-fuels business.

The Gulf state’s domestic crude inventories reached 289.445 million barrels in June from 289.175 million in May, according to JODI.

WSJ