DUBAI: Saudi crude exports fell in August for the fourth month in a row to their lowest levels in three years, official data showed yesterday, as the top oil exporter fights for market share amid weak demand and ample supplies from rival producers.
Saudi crude exports have been sliding in the past few months as shale oil squeezes Saudi oil out of US markets and as demand in Asia, particularly in China, has been slower than expected.
The Opec heavyweight exported 6.663 million barrels per day in August, down from 6.989 million bpd in July, according to data from the Joint Organisations Data Initiative (JODI).
The August export figures were the lowest since March 2011 and down from 7.795 million in August last year. They compared with 6.946 million bpd in June and 6.987 million bpd in May.
North America’s shale boom has started to squeeze Saudi oil out of the US market, the International Energy Agency said in a report last month, estimating Saudi exports would run below 7 million bpd for the last four months of the year. US imports of crude oil from Saudi Arabia averaged around 1.0-1.2 million bpd from May to August, compared with around 1.3-1.6 million bpd from mid-2013 through April 2014, analysis of data from the US Energy Information Administration and Thomson Reuters Trade Flows shows.
Last week, Saudi officials briefed oil market participants in New York on the kingdom’s shift in policy, making clear for the first time that the kingdom is prepared to tolerate a period of lower prices — perhaps as low as $80 a barrel — to retain market share. It has already cut selling prices for its crude to hold on to Asian customers.
A large volume of Saudi oil output went to the domestic market in August due to the seasonal burning of crude to generate power for air-conditioning in the hot summer months, and as the kingdom launches two refineries to add 800,000 bpd in combined capacity to process crude. Saudi refiners processed 2.167 million bpd of crude in August, up from 1.915 million bpd in July and 1.551 million in August 2013, according to the JODI data. Reuters
