Saudi Oil Export Revenues Rise Despite Drop In Volumes

30 Aug 2024 Issue: 67 / 35 By: Jamie Ingram

When Saudi Arabia and its allies decide whether to ease production cuts as planned from October, they will have to assess whether to prioritize market share or revenues. For Saudi Arabia, oil export revenues last quarter were the highest in more than a year, despite a 1mn b/d year-on-year drop in volumes which has seen the US open up a 3mn b/d lead as the world’s largest oil exporter.

Saudi Arabia has been implementing deep Opec+ production cuts since July last year, and exports have fallen accordingly. The voluntary production cuts have helped to prop up oil prices amid demand concerns in China, but they have come at the cost of losing market share to producers outside of the group.

Saudi Arabia and seven other Opec+ states (the ‘Group of Eight’) are due to begin unwinding their 2.2mn b/d of voluntary cuts from October in a bid to reclaim some lost market share. But, with markets precariously balanced and expected to weaken further in 2025, major doubts persist over whether Opec+ can proceed as planned (MEES, 7 June). “With demand set to slow after summer, and both Opec and non-Opec supply to increase from 4Q, we foresee a softening balance, turning to surplus in 2025,” notes Morgan Stanley. (CONTINUED - 1763 WORDS)