Saudi crude exports rise even as domestic demand hits five-year high

Saudi Arabia's crude exports rose 146,000 b/d on the month to 7.2 million b/d in June despite domestic product demand climbing to the highest level since 2017, according to the latest figures from the Joint Organizations Data Initiative.

The world's largest oil exporter brought more supply to the market to meet calls from consumers to ease high oil prices.

The volume was still below the kingdom's supply in March when it sold 7.24 million b/d into the global oil markets.

Domestic demand for oil products increased by 364,000 b/d to 2.79 million b/d, the highest level in five years. As a result, the kingdom's refinery intake hit a record high, climbing 100,000 b/d to 2.85 million b/d in June, data showed.

Saudi Arabia has been increasingly prioritizing the development of its downstream sector as it focuses on building large integrated refineries at home and abroad.

The kingdom's refining capacity rose 13.7% in 2021, one of the biggest increases among its peers, according to the OPEC Annual Statistical Bulletin published in June.

The OPEC+ kingpin added 400,000 b/d of refining capacity in 2021, raising its overall capacity to refine crude to 3.33 million b/d. The increase was largely due to the addition of the 400,000 b/d Jizan refinery in the country's Red Sea-facing western coast.

Direct crude burn

Saudi Arabia's direct burn of crude also rose by 105,000 b/d to 687,000 b/d in June - its highest level since July 2021 - due to higher consumption of electricity in the summer months.

Riyadh has been moving away from burning crude to produce electricity and has been switching to gas-fired power plants. However, recent maintenance work at some gas-based plants has resulted in the recent spike in the use of crude for domestic use, analysts say.

Saudi Arabia's oil inventory at the end of June declined by 2.57 million barrels to 141.85 million barrels as the kingdom released more crude for export as well as domestic consumption purposes.

Together, Saudi Arabia's supply to the market through exports, direct use and refinery runs reached 10.74 million b/d, which is higher than JODI figures for production for June, which suggests an output level of 10.646 million b/d.

The JODI database is maintained by the Riyadh-based International Energy Forum.