Saudi Arabia has returned to supplying the market at pre-pandemic levels, with its January crude oil exports, direct burn and refinery runs adding up to their highest in three years, except during the one-month price war of April 2020, according to data reported by the Joint Organizations Data Initiative.
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The kingdom has been gradually unwinding the historic production cuts it implemented along with the rest of OPEC, Russia and other allies since the market crash in the early months of the pandemic.
Saudi Arabia's January crude production of 10.15 million b/d is already higher than it was immediately prior to the price war, the JODI data showed.
The volume it supplied to the market was slightly higher, as it drew from its inventories to boost exports and refinery runs.
Saudi crude exports hit 6,996 million b/d in January, most since the price war, while refinery runs were their highest since November 2018 at 2.777 million b/d and direct burn of crude for electricity generation was a four-month high at 402,000 b/d.
Totaling up the three comes out to 10.175 million b/d of crude supplied to the market, an increase of 226,000 b/d from December and a level not seen since January 2019.
Saudi crude stocks stood at 133.7 million barrels as of January, the JODI data showed. Stock levels in the country have steadily decreased since hitting a peak of 329.4 million barrels in October 2015.
As the OPEC+ alliance continues to raise its quotas, Saudi production is set to rise in the months ahead, and the kingdom remains under pressure from its key customers to hike output even faster, to offset the impact of western sanctions on Russia over the Ukraine war. So far, Saudi Arabia has demurred, wary of upsetting the OPEC partnership with Russia.
The coalition was forged in late 2016 and has coordinated a series of production cuts to prop up the market, save that one-month price war, when Saudi Arabia and Russia could not agree on a strategy to combat the emerging pandemic. A month later, OPEC+ countries signed off on a historic 9.7 million b/d production cut that they are hoping to completely taper by the end of 2022.
For February, Saudi Arabia has a production quota of 10.227 million b/d, rising to 10.331 million b/d in March and 10.436 million b/d in April -- and an eventual target of 11 million b/d, under the OPEC+ deal.
The alliance will next convene March 31 to decide on May quotas.
The JODI figures are maintained by the Riyadh-based International Energy Forum.