US imports of Saudi oil set to drop as high prices and maintenance deter buyers
US imports of Saudi Arabian crude are set to fall to the lowest level since October, as high prices and refinery maintenance deter buyers.
Shipments from the kingdom are forecast to drop to about 400,000 barrels per day in both February and March, from an average of 500,000 barrels per day in the three prior months, according to energy intelligence firm Kpler. American refineries typically conduct seasonal maintenance during February and
March, leaving additional volumes for Riyadh’s more-profitable Asian market. The planned repairs are set to conclude by the spring when refineries gear up for the high-demand summer season.
The dropoff comes as the White House tries to tame runaway inflation. US President Joe Biden has discussed global energy with King Salman bin Abdulaziz al-Saud, according to a statement. So far, the kingdom has stuck to its plan to gradually increase output. Oil prices have already climbed above $90 a barrel amid ongoing geopolitical tensions over Eastern Europe, adding to inflation pressures for top consumers such as the US as pump prices surge to the highest levels in years.
Demand for the kingdom’s oil from American buyers has also been limited by placement of roughly 40mn barrels of high-sulphur oil from the Strategic Petroleum Reserve, which can replace Saudi crudes. The Middle East nation’s oil price hikes have also turned off some US buyers, allowing more volume to head east, traders said. More than 60% of Saudi Arabia’s exports typically go to Asian markets.
“Saudi is focused on keeping Asian clients happy, with volumes boosted so far this month to eastern Asia and China in particular,” said Matt Smith, an oil analyst at Kpler. “More barrels heading east has been the result of Saudi OSPs (Official Selling Price) to the US, which were hiked in January and March – and kept flat in February, while they were cut to Asia,” he added.
Last March, US imports of Saudi crude totalled 309,000 barrels per day, the lowest level seasonally since 1987, Energy Information Administration data show.
March, leaving additional volumes for Riyadh’s more-profitable Asian market. The planned repairs are set to conclude by the spring when refineries gear up for the high-demand summer season.
The dropoff comes as the White House tries to tame runaway inflation. US President Joe Biden has discussed global energy with King Salman bin Abdulaziz al-Saud, according to a statement. So far, the kingdom has stuck to its plan to gradually increase output. Oil prices have already climbed above $90 a barrel amid ongoing geopolitical tensions over Eastern Europe, adding to inflation pressures for top consumers such as the US as pump prices surge to the highest levels in years.
Demand for the kingdom’s oil from American buyers has also been limited by placement of roughly 40mn barrels of high-sulphur oil from the Strategic Petroleum Reserve, which can replace Saudi crudes. The Middle East nation’s oil price hikes have also turned off some US buyers, allowing more volume to head east, traders said. More than 60% of Saudi Arabia’s exports typically go to Asian markets.
“Saudi is focused on keeping Asian clients happy, with volumes boosted so far this month to eastern Asia and China in particular,” said Matt Smith, an oil analyst at Kpler. “More barrels heading east has been the result of Saudi OSPs (Official Selling Price) to the US, which were hiked in January and March – and kept flat in February, while they were cut to Asia,” he added.
Last March, US imports of Saudi crude totalled 309,000 barrels per day, the lowest level seasonally since 1987, Energy Information Administration data show.
