|Saudi Net Crude Oil Exports|
|By John Busby|
|26 Jun 2008|
The UK Prime Minister, Gordon Brown, has just visited Jeddah, together with leading industrialists in an attempt to boost Saudi crude oil production, reflecting his concerns with the current crude oil price escalation. In response, the Saudi oil minister has promised to raise production by 500,000 barrels per day. However, a closer look at production/consumption levels in the Kingdom, suggests that the Prime Minister's trip was not as fruitful as the pre-summit media anticipated.
BP Statistical Review 2008
BP has just published its annual Statistical Review which provides a comprehensive review of statistics encompassing oil, gas and coal reserves, production and consumption together with many other aspects of global energy vital facts and figures.
It does have certain caveats as to the source of the data and indeed the size of proven reserves is subject to much controversy as in spite of continuous production some national reserves fail to reduce in size without parallel statements of newly confirmed augmentations.
However, the figures for national production and domestic consumption are for the purpose of this analysis deemed to be accurate.
Saudi crude oil production and consumption
The UK Prime Minister, Gordon Brown, has just visited Jeddah, together with leading industrialists in an attempt to boost Saudi crude oil production, reflecting his concerns with the current crude oil price escalation, likely to restrain economic growth and lead to inflation. In response, the Saudi oil minister has promised to raise production by 500,000 barrels per day.
From figures in the BP Statistical Review the following table of production, domestic consumption and net exported crude oil has been compiled.
The chart below has then been drawn from them:
From this it can be seen that Saudi oil production and net exports peaked in 2005, while domestic production steadily increased. In fact, net exports reduced by 10.5% in the two year period 2005-2007, of which a reduction of 6.7% occurred in 2007.
Net exports in 2005 were 9.223 million barrels per day, 8.848 million barrels per day in 2006 reducing to 8.269 million barrels per day in 2007.
If the Gordon Brown has been briefed by his officials and industrial colleagues on his mission, the level of net exports does not appear to have been discussed. Production has probably already fallen to 10 million barrels a day, while domestic consumption continues to rise.
It does seem to be the case that Saudi Arabia is unable to increase its contribution to world supply without restraining its internal demand, as unless the trend observed in the BP Statistical Review has changed, Saudi production has passed its peak.
Gordon Brown’s mission is therefore unlikely to ameliorate the current oil shock.