Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Asharq Al-Awsat
Asharq Al-Awsat
Business
London - Asharq Al-Awsat

Saudi Oil Production Capacity at Highest Levels in Over 2 Years

Aramco oil tanks (Reuters)

Saudi Arabia's crude oil production grew to 10.538 million bpd in May, rising 0.9 percent from 10.441 million bpd in April.

According to official data revealed Tuesday, Saudi crude exports in May fell to their lowest level in four months at 7.050 million bpd, down 4.5 percent from April.

US President Joe Biden's recent visit to the Kingdom concluded without any announcement about the Kingdom's intention to increase its production to help reduce fuel prices.

Saudi Foreign Minister Prince Faisal bin Farhan announced that he does not see a shortage of oil in the market but rather a shortage of refining capacity, which makes it necessary to increase investment in processing crude oil into various oil products.

The data also showed a slight increase in oil exports to 1.527 million bpd, while the production of local refineries rose 0.211 million bpd to 2.749 million bpd in May.

Monthly export figures are provided by Saudi Arabia and other OPEC members to the Joint Organizations Data Initiative (JODI).

Meanwhile, during Tuesday's trading, oil prices fell 2 percent after an increase of more than $5 a barrel on Monday due to fears that oil demand would be affected by a possible economic slowdown and dollar weakness.

September Brent crude was down 1.12 percent at $105.08 per barrel, and the West Texas Intermediate dropped 1.16 percent to $101.33 a barrel.

The IMF said that eastern Europe and Italy would likely suffer serious recessions unless countries managed to pool resources.

In case Russia was to stop supplying gas to Europe, the economies of the Czech Republic, Hungary, Slovakia, and Italy could contract by more than five percent, the IMF added.

Russia's Gazprom told customers in Europe it cannot guarantee gas supplies because of "extraordinary" circumstances, according to the letter seen by Reuters, upping the ante in an economic tit-for-tat with the West over Moscow's invasion of Ukraine.

The letter added to fears in Europe that Moscow may not restart the pipeline at the end of the maintenance period in retaliation for sanctions imposed on Russia over the war in Ukraine, heightening an energy crisis that risks tipping the region into recession.

Oil prices rose more than $5 on Monday, boosted by dollar weakness and expectations that the US Federal Reserve won't raise interest rates by an entire percentage point at its next meeting to combat inflation.

Meanwhile, data on maritime transport showed a decline in Russian oil exports to China and India by 30 percent from their highest levels in the wake of the Russian invasion of Ukraine in late February.

Flows to Asia, led by China, accounted for about half of Russia's total crude flows.

Russia's seaborne crude flows to Asia accounted for 55 and 56 percent of total oil exports during the past six weeks.

Bloomberg Agency indicated that these figures include the volumes on tankers heading from Baltic and Black Sea ports to the Suez Canal, bound for Asian countries.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.