Kingdom's exports have not risen and spare crude has been put into storage, industry sources say
Saudi Arabia has produced just under 9 million barrels per day (bpd) so far
in March, but its exports have not risen and spare crude has been put into
storage, industry sources said on Monday.
One source put production at 8.8 million bpd and another at 8.9 million bpd.
The figures are slightly below the 9 million bpd figure given out by a
senior OPEC source last month, although one of the sources said Saudi Arabia
was also producing around 200,000 bpd from the neutral zone, which it shares
Saudi Arabia has said it could provide additional light crude for Europe to
make up for any shortfall left by Libya.
Two sources, however, said on Monday the European refiners, who are most
exposed to the disruption of Libyan crude, were not receiving more from Saudi
Arabia, OPEC's leading producer.
"Saudi is now producing around 8.9 million barrels per day and not all
of it is going out for exports, some is going into storage, so when and if
European customers need more oil, we can meet their demand," one of the
"Saudi exports for March globally are within the 12-month average
around 6.5-6.8 million bpd," one of the sources said.
Those figures refer to crude. In addition, the kingdom exports around half a
million bpd of refined products, a source said.
European trade sources have also said they have not asked for extra crude
and their demand has been reduced by seasonal refinery maintenance. One source
said shipments to Europe from Saudi Arabia were on average between 500,000 bpd
and 700,000 bpd and another said the norm was around 600,000 bpd.
Another source said, however, Saudi Arabia had produced some extra oil for
Europe in March, while reducing shipments to Asia.
Oil last month hit a two-and-a-half year high of nearly $120 a barrel,
driven by concern violence in OPEC producer Libya, which was producing around
1.6 million bpd until protests erupted earlier this year, could stifle exports
for the long term.
Markets are also nervous disruption could spread across the oil-producing
Brent crude was back around $116 a barrel on Monday after Western powers
launched a second wave of air strikes on Libya.
Data supplied by Saudi Arabia has since last year shown an increase in the
In addition to storage on its own territory, Saudi Arabia has said it could
store crude in Japan, Egypt and the Netherlands, so that if necessary it could
meet additional demand.