Saudi Arabia, the world’s largest crude shipper, trimmed exports to a 21-month low in February as local refineries took advantage of more abundant supplies and processed a record amount of crude.
Oil exports fell to 6.95 million barrels a day, the lowest since May 2015, from 7.7 million a day in January, according to data published Tuesday on the Riyadh-based Joint Organisations Data Initiative website. The kingdom boosted production to 10 million barrels a day from 9.7 million a day, the data show.
Saudi Arabia is bearing the brunt of the output cuts that members of the Organization of Petroleum Exporting Countries pledged to make in the first six months of this year. It committed to pump no more than 10.058 million barrels a day, as OPEC and other major producers sought to rein in global oversupply and support prices.
Saudi refineries increased the amount of crude they processed in the month by 26 percent to 2.67 million barrels a day, the highest in JODI data going back to January 2002. The amount of crude used directly as fuel in power plants and other facilities also rose, as did volume in storage. Stockpiles increased to 264.7 million barrels at the end of February from almost 262 million barrels in January.
Saudi Arabian Oil Co. was planning an 80-day maintenance work at its Riyadh refinery starting in late February to last through mid-May, according to two people with knowledge of the situation. The refinery has capacity to process 120,000 barrels of crude a day, according to data compiled by Bloomberg.
“It seems that Aramco is preparing for the long shutdown of the Riyadh refinery by increasing production from other refineries as they need to keep some products in stocks while the refinery is closed,” said Mohamed Ramady, an independent London-based analyst. “The amount of crude not being processed at the Riyadh refinery is reflected in the oil stockpiles in February as they increased from January.”
The country plans to double refining capacity to as much as 10 million barrels a day within 10 years, Saudi Energy Minister Khalid Al-Falih has said. Saudi Arabian Oil Co., the state producer known as Saudi Aramco, expects to start operating a 400,000 barrel-a-day refinery next year at Jazan on the Red Sea, adding to two other plants of the same size that have come online since 2013.