Trending
Commodities
  • WHEAT
    337.28 USD 0.37%
  • WTIOIL
    79.98 USD 0.62%
  • XAG
    23.15 USD 1.25%
  • XAU
    1797.92 USD 1.44%
  • XCU
    3.85 USD -0.49%
  • XPD
    1824 USD 2.98%
  • XPT
    1013 USD -0.1%
  • ALU
    2560.89 USD -0.5%
  • RICE
    17.63 USD 0%
  • BRENTOIL
    85.57 USD 1.57%
  • SOYBEAN
    14.41 USD -2.52%
  • NG
    6.28 USD -2.98%

Saudi Arabia has plans to increase export capacity

Saudi Arabia plans to increase export capacity by up to one million barrels of oil per day. This is to be done by 2030.

The plan is to reduce the use of oil in energy production

Saudi Arabia has come up with a plan to reduce the direct use of oil in energy production. Instead of oil, it is to start using more energy from gas and renewable sources.

Currently, Saudi Arabia generates about 51% of its electricity from oil and 49% from natural gas. So by 2030, it wants to reduce its use of oil and move towards a more environmentally friendly path. At the same time, the oil giant will be able to export the oil it saves.

The long-term plan is to be as energy-friendly as possible and ideally achieve net zero. Of course, these plans are long-term and Saudi Arabia would like to achieve them by 2060.

Consumption is driven up by air conditioning

As we experience higher temperatures every year and the summers get hotter, the demand for air conditioners increases. So in Saudi Arabia, when temperatures are high, they have to generate more energy to run air conditioners in homes.

The Joint Organisations Data Initiative (JODI) shows information from May where we see confirmation of this trend. In May, direct oil consumption increased to 582 000 barrels per day. This is 185,000 barrels per day more than in April and 131,000 barrels per day more than in May last year.

So even this steady increase in the need for oil for domestic use is limiting the ability to export oil abroad. Despite this, we need not worry that Saudi Arabia does not have enough oil for foreign markets. It wants to reach a production capacity of 13 million barrels per day by 2027.

oil production and Silhouettes of continents next to the flag of Saudi Arabia

Read also: Soft economic activity sent crude oil down to year’s support

Analysts said direct flaring of oil and products at power plants in Saudi Arabia accelerated this summer, which could lead to less available oil supply for international markets.

Saudi Crown Prince Mohammed bin Salman himself has spoken out on the subject of exports, saying.

“The kingdom will meet its challenge in this regard as it has announced an increase in its production capacity to 13 million barrels per day, after which it will have no more capacity to increase production.”

So if there is no more capacity to increase production any further, the aforementioned changes in energy production may be a great bonus for the kingdom’s exports.

Bruno is an Investment enthusiast with several years of experience in the industry. He enjoys following the latest news and technology trends...

Comments

Post has no comment yet.

Want add your comment? Sign up or Sign in