Metallurgy / Chemicals / Rubber & Plastics

According to Huacheng Import and Export Data Observation, Saudi Arabia may consider significantly reducing its crude oil exports to the United States starting from July, in order to affect the tightening of key oil markets in the world.

In recent years, Saudi Arabia has significantly reduced its crude oil exports to the United States several times, attempting to tighten the US market. The United States reports weekly inventory data on crude oil and petroleum products, and Huacheng Import and Export Data Observation reports.

In early June, OPEC+oil producing countries decided to maintain their current production reduction until the end of 2024. However, OPEC's largest oil producing country, Saudi Arabia, stated that it would voluntarily reduce its daily crude oil production by another 1 million barrels to about 9 million barrels in July. Saudi Energy Minister Salman stated that the production reduction may be extended beyond July, as reported by Huacheng Import and Export Data Watch.

The crude oil production level in July will be the lowest in Saudi Arabia since 2011, excluding the initial reduction in production after the outbreak of the epidemic in 2020 and the reduction in production after the attack on Saudi Aramco facilities in September 2019.

According to Huacheng Import and Export Data Observation, even after Saudi Arabia announced that it would reduce production in July this year, Saudi Aramco, the world's largest crude oil exporter, still assured at least five refineries in northern Asia that they would get all the crude oil quantity specified in the contract in July.

Saudi Aramco may prioritize supplying crude oil to its valued Asian markets, thereby reducing exports to the United States and forcing the market to tighten supply, as is evident in inventory reports. In addition, Bloomberg's Blas pointed out that Saudi Aramco also controls the Mortiva refinery with the largest production capacity in the United States and may affect the supply of Arthur Port refineries with a daily processing capacity of 630000 barrels of crude oil, according to Huacheng Import and Export Data Observation.