Saudi Arabia is set to cut production by 500,000 b/d from October levels in January under the recent Opec/non-Opec output deal. Crude and refined product exports are both on track for record annual highs in 2016, but lower production will mean one, or both, will have to fall in 2017. But hydrocarbon revenues are set to rise regardless.
Crude prices have surged more than $8/B since the 30 November Opec meeting. Brent was at $54/B as MEES went to press, and MEES calculates that Saudi crude export revenue could rise more than $30bn in 2017 to above $160bn as a result – assuming crude prices remain at these levels. And maintenance work at key refineries in late 2016 sets the kingdom up to further boost products exports next year if it chooses to, from what will be record highs in 2016. Higher crude prices will also squeeze the margins for competing refineries in Europe and Asia, affording the kingdom’s refineries a competitive advantage thanks to their subsidised feedstock. (CONTINUED - 977 WORDS)