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Zawya
28-05-2025
- Business
- Zawya
Saudi's refining boom helps it weather oil price war: Bousso
(The opinions expressed here are those of the author, a columnist for Reuters.) LONDON - Saudi Arabia has been cranking up oil refining operations to capture strong profit margins, helping the kingdom offset revenue lost from declining crude prices and exports. The world's top oil exporter has in recent years invested heavily in expanding and modernizing its refining and petrochemical capacity at home and overseas to meet growing demand for fuel and plastics while also securing outlets for its crude oil. Saudi Arabia has nine local refineries with a combined capacity of 3.33 million barrels of oil per day (bpd), accounting for roughly 3% of global demand, which are configured to process its domestically produced crude oil. It operates another 4.3 million bpd of refining capacity abroad, including in China, the United States and Malaysia. The kingdom's domestic refineries processed 2.94 million bpd in March, the highest-ever volume for that month and only a smidgen below the record high of 2.96 million bpd in April 2024, according to data from the Joint Organizations Data Initiative (JODI). The 12% monthly increase in refining crude intake in March was 23% above the 10-year average for the same period. It correlates with a 12% month-on-month drop in Saudi crude exports to 5.75 million bpd in March, according to the data, highlighting the kingdom's flexibility between directly selling crude to other refiners and refining it itself. Saudi refinery rates likely declined by around 200,000 bpd in April due to planned plant maintenance, but should remain at elevated levels ahead of peak summer demand season, according to Keshav Lohiya, CEO and founder of analytics firm Oilytics. Saudi's refined product exports, which include diesel, gasoline, jet fuel and fuel oil, rose to a record 1.58 million bpd in March, before declining to 1.48 million bpd in April and 1.42 million bpd so far in May, according to data from ship tracking firm Kpler, likely reflecting refinery turnaround. FLEXIBILITY This integrated strategy offers Saudi Aramco, the country's national oil company, an effective way to manage oil price volatility as refining margins - the profit made by processing crude oil into transportation fuels and chemicals - typically rise when feedstock prices decline. It will likely prove valuable going forward after OPEC+, an alliance of major producing countries unofficially led by Riyadh and including Russia, started to rapidly unwind 2.2 million bpd of output since April. The move to add a large volume of oil into an already well-supplied market concerned by the impact of U.S. President Donald Trump's tariffs on global economic activity put heavy pressure on oil prices, which dropped to around $65 a barrel from a high of $82 in mid-January. Saudi Arabia and its allies will likely deepen the price war when they meet later this month by further accelerating the unwinding of their production cuts. Refining margins have held strong so far this year despite the growing economic headwinds, benefiting from lower crude prices and healthy demand for diesel in particular. Benchmark Singapore refining margins are currently near their highest since February 2024 of around $8 a barrel, according to LSEG data. Regardless of the possible impact of the trade wars, global fuel demand in the northern hemisphere typically peaks from June through early September, as motorists drive more over the summer while more air travel buoys jet fuel demand. This will therefore likely support refining margins in the coming months. Saudi Aramco placed 28% of its crude oil production in domestic refining operations in 2024, up from 26% the previous year, according to its annual report. It also supplied 53% of the crude used by its joint venture refineries abroad. The International Monetary Fund assessed that Saudi Arabia will need an average Brent oil price of around $90 a barrel in order to balance its national budget. While crude prices are likely to remain at current levels or even lower for most of the year given the surge in supplies and demand uncertainty, the increased refining operations offer Riyadh an effective tool to manage oil price volatility and to better withstand a protracted price war. ** The opinions expressed here are those of the author, a columnist for Reuters. ** Want to receive my column in your inbox every Thursday, along with additional energy insights and trending stories? Sign up for my Power Up newsletter here. (By Ron Bousso; Editing by Susan Fenton)
Reuters
27-05-2025
- Business
- Reuters
Saudi's refining boom helps it weather oil price war: Bousso
LONDON, May 27 (Reuters) - Saudi Arabia has been cranking up oil refining operations to capture strong profit margins, helping the kingdom offset revenue lost from declining crude prices and exports. The world's top oil exporter has in recent years invested heavily in expanding and modernizing its refining and petrochemical capacity at home and overseas to meet growing demand for fuel and plastics while also securing outlets for its crude oil. Saudi Arabia has nine local refineries with a combined capacity of 3.33 million barrels of oil per day (bpd), accounting for roughly 3% of global demand, which are configured to process its domestically produced crude oil. It operates another 4.3 million bpd of refining capacity abroad, including in China, the United States and Malaysia. The kingdom's domestic refineries processed 2.94 million bpd in March, the highest-ever volume for that month and only a smidgen below the record high of 2.96 million bpd in April 2024, according to data from the Joint Organizations Data Initiative (JODI). The 12% monthly increase in refining crude intake in March was 23% above the 10-year average for the same period. It correlates with a 12% month-on-month drop in Saudi crude exports to 5.75 million bpd in March, according to the data, highlighting the kingdom's flexibility between directly selling crude to other refiners and refining it itself. Saudi refinery rates likely declined by around 200,000 bpd in April due to planned plant maintenance, but should remain at elevated levels ahead of peak summer demand season, according to Keshav Lohiya, CEO and founder of analytics firm Oilytics. Saudi's refined product exports, which include diesel, gasoline, jet fuel and fuel oil, rose to a record 1.58 million bpd in March, before declining to 1.48 million bpd in April and 1.42 million bpd so far in May, according to data from ship tracking firm Kpler, likely reflecting refinery turnaround. This integrated strategy offers Saudi Aramco ( opens new tab, the country's national oil company, an effective way to manage oil price volatility as refining margins - the profit made by processing crude oil into transportation fuels and chemicals - typically rise when feedstock prices decline. It will likely prove valuable going forward after OPEC+, an alliance of major producing countries unofficially led by Riyadh and including Russia, started to rapidly unwind 2.2 million bpd of output since April. The move to add a large volume of oil into an already well-supplied market concerned by the impact of U.S. President Donald Trump's tariffs on global economic activity put heavy pressure on oil prices, which dropped to around $65 a barrel from a high of $82 in mid-January. Saudi Arabia and its allies will likely deepen the price war when they meet later this month by further accelerating the unwinding of their production cuts. Refining margins have held strong so far this year despite the growing economic headwinds, benefiting from lower crude prices and healthy demand for diesel in particular. Benchmark Singapore refining margins are currently near their highest since February 2024 of around $8 a barrel, according to LSEG data. Regardless of the possible impact of the trade wars, global fuel demand in the northern hemisphere typically peaks from June through early September, as motorists drive more over the summer while more air travel buoys jet fuel demand. This will therefore likely support refining margins in the coming months. Saudi Aramco placed 28% of its crude oil production in domestic refining operations in 2024, up from 26% the previous year, according to its annual report. It also supplied 53% of the crude used by its joint venture refineries abroad. The International Monetary Fund assessed that Saudi Arabia will need an average Brent oil price of around $90 a barrel in order to balance its national budget. While crude prices are likely to remain at current levels or even lower for most of the year given the surge in supplies and demand uncertainty, the increased refining operations offer Riyadh an effective tool to manage oil price volatility and to better withstand a protracted price war. ** The opinions expressed here are those of the author, a columnist for Reuters. ** Want to receive my column in your inbox every Thursday, along with additional energy insights and trending stories? Sign up for my Power Up newsletter here.
Business Recorder
21-05-2025
- Business
- Business Recorder
Saudi Arabia crude exports fall to 5.754 million barrels per day in March
Saudi Arabia's crude exports in March fell to 5.754 million barrels per day (bpd) from 6.547 million bpd in February, official data showed on Wednesday. The world's largest oil exporter's crude output for March was at 8.957 million bpd, up from 8.947 million bpd in February. Saudi refineries' crude throughput was at 2.944 million bpd in March, up 0.323 million bpd from February's 2.621 million bpd, the data showed. Direct crude burning increased by 100,000 bpd to 383,000 bpd in March. Saudi Arabia and other members of OPEC provide monthly export figures to JODI, which publishes them on its website. Global crude exports dip as trade routes reshuffle again Earlier this month, OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, has agreed to accelerate oil production hikes for a second consecutive month, raising output in June by 411,000 barrels per day.
Zawya
22-04-2025
- Business
- Zawya
Saudi Arabia crude oil exports rise to 6.547mln bpd in Feb
Saudi Arabia's crude exports in February rose to 6.547 million barrels per day (bpd) from 6.073 million bpd in January, official data showed on Tuesday. The world's largest oil exporter's crude output for February was at 8.947 million bpd, up from 8.917 mln bpd in January. Saudi refineries' crude throughput was at 2.621 million bpd in February, up 0.162 million bpd from January's 2.459 million bpd, the data showed. Direct crude burning increased by 8,000 bpd to 283,000 bpd in February, having fallen in January by 4,000 bpd from December to 275,000 bpd. Saudi Arabia and other members of OPEC provide monthly export figures to JODI, which publishes them on its website.
Leaders
18-02-2025
- Business
- Leaders
Saudi Refinery Output Surges 5% Annually in Dec. 2024
Saudi Arabia's refinery output reached 2.54 million barrels per day (bpd) in December. This marks a 5% annual increase, according to Joint Organizations Data Initiative (JODI) figures. Fuel oil constituted 18.2% of total refinery output. Annual production rose 7%, reaching 464,000 bpd. Meanwhile, gas diesel—40% of the refinery mix—fell 5% yearly. Motor and aviation fuel surged 5%, representing 24.7% of total output. Refined crude exports dropped 1% to 1.13 million bpd in December. Diesel dominated exports at 36%, while motor/aviation gasoline contributed 20%. Fuel oil comprised 15% of shipments. Domestically, refinery product demand dipped slightly, falling 26,000 bpd annually to 2.29 million bpd. OPEC+ Maintains Cautious Output Strategy OPEC+ nations continue coordinating output cuts to stabilize global markets amid fluctuating prices. In December, the group delayed production hikes until April 2024. This decision extends supply adjustments through 2026, addressing weak demand and non-OPEC+ oversupply. The alliance retains flexibility to adapt output based on market shifts, prioritizing long-term balance and stable prices. Saudi Arabia reduced direct crude oil burn by 24,000 bpd in December. This usage, for power generation, fell 8% annually to 279,000 bpd. Colder weather and energy efficiency gains drove the decline. Energy Minister Prince Abdulaziz bin Salman reiterated Saudi Arabia's commitment to sustainable practices at the Egypt Energy Show. Saudi-Egypt Energy Partnership Strengthens Regional Ties Saudi firms will develop five Egyptian solar/wind projects, totaling 1.696 gigawatts with SR6.2 billion ($1.65 billion) investments. ACWA Power also secured a deal for Egypt's largest wind initiative—a 2GW South Hurghada plant worth SR8.6 billion. The SR6.7 billion Saudi-Egypt Electricity Interconnection Project will enable 3,000 MW exchanges, boosting regional energy integration. These initiatives align with Saudi Arabia's Vision 2030 goals, emphasizing renewable energy and cross-border collaboration. OPEC+ and regional partnerships underscore the Kingdom's dual focus on market stability and sustainable transition, balancing oil sector dynamics with global economic and environmental trends. Short link : Post Views: 7
