Saudi oil exports to US lowest in 21 years

Saudi Arabia's crude exports to the US plummeted to about 837,000 barrels per day in November. (AFP)

Oil giant Saudi Arabia is gradually reducing crude oil exports to its largest trading partner the United States as it is pushing deeper into China and other fast-growing Asian markets, according to official data.

A decision by Washington to limit its hydrocarbon imports from the Middle East and other Opec producers also contributed to Riyadh cutting down on oil supplies to the US market to their lowest level in more than two decades.

Estimates by the Energy Information Administration (EIA) of the US Department of Energy showed Saudi Arabia's crude exports to the US plummeted to about 837,000 barrels per day in November, their lowest level in 21 years.

Saudi Arabia's crude exports to US have remained above one million bpd for most of the years in the past three decades as the two countries had maintained strong political and economic relations. But they have started to decline rapidly over the past months because of Opec quota restrictions on Saudi oil output, plans by the US to cut hydrocarbon imports from the Middle East, strained ties between the two countries and a drive by the kingdom to expand its exports of oil and other products to the Asian markets.

According to the London-based Centre of Global Energy Studies (CGES), Saudi Arabia's oil exports to the US began their rapid fall in September 2008, but the largest decline occurred at the start of 2009, when the Opec quotas agreed at the end of 2008 began to take effect.

"This decline has helped the US Government meet its objective of reducing the country's dependence on Opec, and the change could become permanent, especially if Riyadh's focus on Asian markets remains," CGES said.

Its figures showed Saudi Arabia supplied nearly 15 per cent of the US's total oil imports at the start of 2007 and the level peaked at around 17 per cent a year later before it started to decline afterwards. Between May and September 2009, the supplies accounted for only 10-11 per cent, according to CGES.

Saudi Arabia, the world's dominant oil power which controls over a fifth of the global proven crude deposits, had been one of the top oil suppliers to the US along with Venezuela before it was overtaken by other countries. Last year, Mexico was ahead of Saudi Arabia as a crude exporter to the US, supplying about 951,000 bpd despite a plunge in those exports. Nigeria also overtook Saudi Arabia, with its oil exports to the US climbing to a 15-month high of around 984,000 bpd in November, according to EIA.

Lower supply volumes allied with a sharp fall in crude prices to slash Saudi Arabia's trade surplus with the US by nearly 76 per cent to about $10.3bn during the first 11 months of 2009 from a record $42.2bn in the same period of 2008, according to Saudi newspapers which quoted government data.

It was the first major decline in the surplus in nearly eight years and it was caused by a sharp fall in Riyadh's exports to Saudi Arabia to around $20bn last year compared with a record $54bn in 2008. "The fall in the kingdom's total exports to the United States was mainly a result of a sharp fall in the value of oil supplies due to lower prices and volumes," said Abdul Washab Abu Dahish, a Saudi economist.

"The reasons for that decline include a drop in the US's total oil imports, a cut in Saudi Arabia's Opec quota, and a drive by the kingdom to expand its Asian markets, mainly China, whose imports of Saudi oil last year surpassed those by the US for the first time."

 

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.

 

Comments

Comments