Saudi Oil Burn Flattens In May Despite Rising Temperatures

23 Jul 2021 Issue: 64 / 29 By: Jamie Ingram

Deep Opec+ cuts have restricted Saudi Arabia’s early summer gas availability, forcing it to burn vast quantities of oil for powergen. With cuts now tapering, crude output could hit 10mn b/d by year-end, and gas output is already on the rise.

Saudi Arabia’s oil burn appears to be levelling off as the kingdom eases its Opec+ crude oil production cuts, in turn boosting associated gas output. Gas is the cornerstone of Saudi Arabia’s power generation, accounting for more than 55% of electricity generated in 2019 (MEES, 9 October 2020). But, as electricity demand rises in the summer, the kingdom is forced to burn more and more oil to offset gas shortages and keep power-hungry air conditioning units running.

The latest Jodi statistics show that oil burn stayed broadly flat in May, edging up by just 14,000 b/d from April, to a still substantial 1.058mn b/d (see chart and table for full data). Although the overall figure was still 56,000 b/d more than in May 2020, critically the month-on-month increase was much reduced from the 106,000 b/d April-May 2020 differential. (CONTINUED - 756 WORDS)