Category: Saudi Arabia

Ignore talk of an OPEC price war, say crude market bulls. Just look at ’s own words to know what will happen next to oil. Price cuts announced by the Saudis, including the biggest discounts for Asia since 2008, sparked speculation that the world’s biggest crude exporter would let oil tumble rather than cede market share to rivals in OPEC. This is misguided, said UBS AG and BNP Paribas SA. Brent is below the $95-to-$110 range endorsed by Saudi Oil Minister , ensuring the country will curb output, they said. Brent, the European benchmark, is plunging toward a bear market amid a surplus of U.S. shale oil and weaker economic growth. The discounts prompted predictions that Saudi Arabia would tolerate lower prices to deter investment in higher-cost U.S. shale. The advance of Islamist militants across a swathe of Iraq and Syria means the kingdom will shore up to support […]

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Saudi Arabia cut its oil costs last week to boost margins for refinery clients and the move didn’t signal the start of a price war, according to a person familiar with the nation’s oil policy. Some refineries in Asia couldn’t process Saudi Arabian crude profitably, according to the person, who asked not to be identified, citing policy. Brent crude, a global benchmark, fell 20 percent since June amid signs of a supply glut. State-owned Saudi Arabian Oil Co. cut prices for all grades and to all regions for November shipments, reducing those for Asia to the lowest level since 2008. Commerzbank AG and Citigroup Inc. were among those who said the cuts might be the start of a price war. To contact the reporter on this story: Wael Mahdi in Manama at To contact the editors responsible for this story: Alaric Nightingale at

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Saudi Arabia, the largest crude producer in OPEC, plans to keep output steady until the end of the year, a person with knowledge of the country’s oil policy said. It made the biggest cut in 20 months in August. Output through the end of the year won’t differ much from August, when the country pumped 9.597 million barrels a day, according to the person, who isn’t allowed to be identified. The nation reduced production by 408,500 barrels a day last month, the most since December 2012, according to its most-recent submission to the Organization of Petroleum Exporting Countries. Demand will rise by the end of the year because of northern hemisphere winter, the person said. Oil demand growth was the weakest since 2012 in the second quarter and industrialized nations’ stockpiles in August rose by more than twice the normal amount for the time of year, according to the […]

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WASHINGTON, Sept. 24 (UPI) — Saudi Arabia aims to use more renewable energy, but for now it burns more crude oil directly than any other nation in the Middle East, a Wednesday report found. By 2023, Saudi Arabia plans to have 120 gigawatts of solar and nuclear power available, more than twice what’s installed currently. Saudi Arabia has few alternative options for power generation , with no domestic coal reserves and a natural gas sector stymied by a lack of foreign investments. As a result, it’s one of only a few nations in the world that utilizes crude oil directly for power generation . A report for the U.S. Energy Information Administration, a branch of the Energy Department, found Saudi Arabia burned 900,000 barrels of oil per day in July, the highest ever recorded for that month. "Saudi Arabia used an average of 700,000 bpd of crude oil for […]

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Saudi Arabia is one of a handful of countries that burn crude oil directly for power generation, according to the Joint Organizations Data Initiative (JODI). During the summer, Saudi Arabia typically experiences an increase in electricity consumption as domestic demand for air conditioning rises. Saudi Arabia burned 0.9 million barrels per day (bbl/d) of crude oil in July, the highest ever recorded in JODI data for the month of July and the highest overall since August 2010. Saudi Arabia used an average of 0.7 million bbl/d of crude oil for power generation during the summers from 2009 to 2013. During that same period, Iraq and Kuwait, the next two largest users of crude oil for power generation in the Middle East, each averaged roughly 0.08 million bbl/d of crude burn. Generally, countries are more likely to consume natural gas or coal to meet higher summer electricity demands. But Saudi […]

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Saudi Arabia ’s newest oil refinery reached full capacity last month, adding to international competition that Total SA and Vitol SA said will force more European plants to close. The Satorp refinery, a venture between Total and Saudi Arabian Oil Co., processed crude at full capacity of 400,000 barrels a day on Aug. 1, Patrick Pouyanne, Total’s president of refining and chemicals, said at a conference in Brussels today. Europe ’s refineries are too small and not sophisticated enough to compete with new plants, Chris Bake, executive director at Vitol, the world’s largest oil trader, said at a separate conference in Fujairah, in the United Arab Emirates . “Rationalization is a necessity for Europe,” Pouyanne said at the Platts European Refining Summit. “We are facing a global overcapacity” and companies in Europe should close about 10 percent of refining capacity by 2020 because of falling domestic demand and rising […]

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Saudi Arabia will need to keep cutting oil output to sustain prices above $100 a barrel, even after the kingdom’s largest reduction in two years, according to BNP Paribas SA and Societe Generale SA. The world’s biggest crude exporter told OPEC last week it pumped 408,000 barrels a day less last month, about as much as Australia produces. Output rose in Iran , Iraq and Nigeria, adding to supply that drove benchmark Brent crude futures below $100 this month for the first time since June 2013. Saudi Arabia probably will have to cut a similar amount again to stabilize prices, the banks said. Global oil demand growth this year will be the weakest since 2011, just as the U.S. shale boom means oil production from countries outside OPEC rises by the most since the 1980s, according to the International Energy Agency. The glut is prompting most of OPEC’s Middle […]

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Islamic State’s Ultimate Goal: Saudi Arabia’s Oil Wells For the terrorist group known as the Islamic State, Syria and Iraq were a good place to start their campaign, but in order to survive and prosper it knew from the outset that it had no choice but to set its sights on the ultimate prize: the oil fields of Saudi Arabia. It is in that direction that the battle for control of the world’s largest oil fields is currently heading. Islamic State — which has its origins in al-Qaeda – knows fully well that in order to sustain itself as a viable and lasting religious, political, economic and military entity in the region, it has to follow the same objectives established by al-Qaeda when Osama bin Laden broke off his relations with the Saudi monarchy and vowed to bring down the House of Saud. Bin Laden’s ire at the Saudi […]

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Saudi Arabia is the world’s largest holder of crude oil proved reserves and was the largest exporter of total petroleum liquids in 2013. In 2013, Saudi Arabia was the world’s second-largest petroleum liquids producer behind the United States and was the world’s second-largest crude oil producer behind Russia . Saudi Arabia’s economy remains heavily dependent on petroleum. Petroleum exports accounted for 85% of total Saudi export revenues in 2013, according to the Organization of the Petroleum Exporting Countries (OPEC)’s Annual Statistical Bulletin 2014 . With the largest oil projects nearing completion, Saudi Arabia is expanding its natural gas, refining, petrochemicals, and electric power industries. Saudi Arabia’s oil and natural gas operations are dominated by Saudi Aramco, the national oil and gas company and the world’s largest oil company in terms of production. Saudi Arabia’s Ministry of Petroleum and Mineral Resources and the Supreme Council for Petroleum and Minerals have […]

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Saudi Arabia , the world’s biggest crude exporter, told OPEC that it cut production by 408,000 barrels a day in August, amid signs of a supply surplus that’s pushed prices to a 16-month low. The kingdom produced 9.6 million barrels a day, compared with 10 million barrels daily in July, it said in a submission to the Organization of Petroleum Exporting Countries, according to the group’s monthly oil market report today. Data collected by Bloomberg News show no bigger monthly decline since December 2012. Other estimates collated by OPEC, based on what it calls secondary sources, show the nation cut output by 55,200 barrels to 9.86 million a day. “It does illustrate a desire not to oversupply the market, and it does illustrate they are actively defending $100 a barrel,” Mike Wittner , head of oil market research at Societe Generale SA, said by phone from New York . […]

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