Saudis Unveil Another Winning Energy Hand

Saudi Arabia Unveils Another Winning Energy Hand

Saudi Arabia isn’t just a one-trick pony when it comes to the energy market.

A casual observer might think that the country’s energy game plan is as simple as keeping the spigots wide open in order to pressure U.S. shale oil producers.

But, Saudi Arabia is playing a much more complex game…

You see, the kingdom is also busy transforming itself into one of the world’s largest oil refiners. So big, in fact, that its potential capacity is even dwarfing oil majors like ExxonMobil (XOM).

This is sure to shake things up in the industry.

Becoming Highly Refined

Two new refineries – Yasref and Yanbu – have already come online in the kingdom. The new facilities will add 800,000 barrels per day (bpd) of refining capacity.

The planned Jazan refinery will add another 400,000 bpd. The combination will bring Saudi Arabia’s refining capacity to more than three million bpd!

That pushes Saudi Arabia into the top five list of countries in terms of refining capacity. The Kingdom is already in second place, behind the United States, when it comes to refined products exports.

Plus, when you add in Saudi Arabia’s stakes in overseas refineries, such as South Korea’s S-Oil, the Saudis have an excess of five million bpd of possible refined product output.

And the country is not stopping there…

The kingdom’s goal is to have eight to 10 million barrels of global refining capacity within a few years. That amount would put ExxonMobil in the shade.

Refined products are becoming so important to the Saudis, it’s believed that two-thirds of the trading done by the state-owned trading arm, Aramco Trading, is now focused on products and not crude oil.

The Wind Behind the Shift

Curiously, the Saudis have recently turned down requests from China for extra crude oil shipments in May and June.

The Saudis saying no to their best customer is another clear indication of the shift. But why is this happening?

1 2 3
View single page >> |

Disclosure: None

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.