Touching the lowest level in almost a decade, Saudi Arabia’s crude oil exports in May are expected to plunge to about 6 million bpd. As the coronavirus crisis hits demand, domestic refining output is also likely to fall.
Under a supply reduction pact with OPEC+ alliance, the kingdom will cut crude production by 23 percent to about 8.5 million bpd in May and June. Asia is taking about 4 million bpd of Saudi crude oil exports for May, industry sources said. Oil exports are seen at less than 600,000 bpd to the US.
Lower production of associated gas indicated by falling oil output. To save crude for exports, the kingdom has increasingly sought to generate more power from gas. However, cheaper crude available for domestic use resulted from lower global oil demand. This would mean more oil is used when power demand increases due to the use of air-conditioners this summer.
Demand, in general, was expected to be weaker for oil and its products. About 2.4 million bpd of crude is usually processed by Saudi refineries. As product demand falls, the refineries were likely to use less crude.
