Saudi Arabia’s Shift Up The Value Chain Offsets 7-Year Crude Export Low

Saudi Arabia may have ceded market share in its key Asian and US crude export markets last year, but the blow was eased by its growing role as a products exporter. With the kingdom busy securing new clients for its refined products and more refining capacity due online this year, 2016’s 7.65mn b/d may stand as the high-watermark for crude exports for some time.

Saudi Arabia’s oil products exports almost certainly topped 2016’s annual record of 1.37mn b/d last year with shipments averaging 1.43mn b/d for the first 11 months as Riyadh sought to offset the decrease in crude exports resulting from the Opec production agreement.

Not just has Saudi Arabia over-complied with the output cuts, but in ramping up its refining runs, crude exports have fallen further still and are on track for a seven-year low of 6.96mn b/d (see chart 1).

In terms of export revenue, the 8% year-on-year fall in crude export volumes was more than offset by a 28.6% increase in the price of Saudi benchmark Arab Light and the shift towards refined products.


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