Why Saudi Arabia isn’t interested in the US oil market
After the crisis and the collapse of commodity quotations, the segment saw changes in supply, which seemed to be quite stable. Exports from Saudi Arabia to the United States decreased, and the lowest level in 35 years was recorded. During the last month only one cargo from the kingdom came to American terminals, which is about 133 thousand barrels per day. Experts suggest that the U.S. oil market is no longer so interesting to saudits after the crisis that the country has experienced.
For comparison, in April the supply from the kingdom was 1.3 million barrels per day, and the new volume is about a tenth of its share. Moreover, almost the entire last year and at the beginning of the current year Saudi Arabia sold 475 thousand barrels a day to the states on average. The peak of supplies fell during the oil war between the kingdom and Russia, and after that the U.S. reduced its purchases of raw materials.
According to a number of analysts, the decline in exports from Saudi Arabia will force Washington to revise its policy regarding the use and purchase of rough. It is necessary to look for new suppliers and use the reserves. And if a few months ago the country had enough of these volumes, now oil refineries have restored full operation and are increasing their turnover, and this requires raw materials.
Representatives of Saudi Arabia said that next month an increase in supplies to the United States is unlikely, but they do not yet talk about how cooperation will develop in the future.
The US is not the only one to whom saudits have reduced exports. For example, if back in May about 2 million barrels per day were sent to China, in June the volume fell to 1.3 million barrels. At the same time, oil exports from the kingdom increased to India and Japan.
In July, Saudi Arabia lifted production restrictions and increased oil production by 1 million barrels. According to the Minister of Energy, the kingdom has decided to abandon the agreements to reduce volumes, especially since they were introduced on its own initiative and are voluntary. Following the Saudis, a number of other Gulf States have adopted the same position.
In June, the United Arab Emirates, Saudi Arabia and Kuwait came to an agreement to reduce production by 1.18 mn barrels. This decision was made in addition to the existing quotas, which were introduced under the OPEC+ deal. The country’s position was explained by its intention to stabilize the cost of oil and its products. In addition, Saudi Arabia gave up discounts on raw materials, which were introduced for buyers from Asia and Europe.