Saudi Arabia Increases Fuel Oil Use Amid Declining Gas Production
Saudi Arabia is expected to raise its fuel oil imports to 1.7 million tons (360,000 bpd) for power generation this summer, an 86% increase year-on-year. This shift occurs as natural gas output drops to 10.5 bcfd, partly due to oil production cuts exceeding 3 million barrels per day after the Iran conflict affected exports.
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Saudi Arabia's fuel oil imports are projected to reach 1.7 million tons (360,000 bpd) in April, significantly increasing due to a drop in natural gas supply to 10.5 bcfd. The country has shut over 3 million barrels per day of oil production following the Iranian blockade on the Strait of Hormuz, impacting gas extraction.
Power demand peaks in summer months, and analysts predict oil and fuel oil consumption may exceed 1 million barrels per day. The Jafurah gas field, launched in December, aims to enhance gas production but is yet to offset current declines. If disruptions persist, crude burn may rise, threatening export revenues.
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