I always get the impression that many (most?) Americans don't realize how tight global supplies of crude oil and natural gas are.
In this case, either Saudi Arabia does not have the crude oil or Saudi Arabia does not have the capacity to produce more fuel oil.
It also explains why Saudi Arabia does not want to "lose" Russia as a member of OPEC+.
Bottom line: Saudi Arabia needs oil or refined oil products to produce electricity to meet air conditioning demand.
From The Daily Star, originally an exclusive from Reuters that is now not accessible due to a paywall:
- Saudi Arabia more than doubled the amount of Russia fuel oil it imported in 2Q22
- purpose: feed power stations too meet summer cooling demand and free up the kingdom's own crude export
- obviously little spare capacity in Saudi Arabia
- import numbers:
- 647,000 tonnes (48,000 bbls per day) of fuel oil from Russia (April - June, 2022)
- up from 320,000 tonnes in the same period last year
- for the full year 2021, Saudi imported 1.05 million tonnes of Russian fuel oil
- Saudi's summer burn:
- 600,000 bpd in summer months;
- 300,000 bpd in winter months;
- increased use of natural gas has reduced the amount from as much as one million bpd in 2010
- much more at the link
Oil-fired power generation has roared back this year, burning crude and products to meet strong growth in electricity demand. For Saudi Arabia and Iraq, April fuel oil and direct crude use jumped by 270 kb/d month-on-month.
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