Saudi Arabia, the world’s biggest crude exporter, boosted shipments to a three-month high in June as production headed for an all-time high.
Exports climbed to 7.5 million barrels a day in June, the highest since March, as output rose to 10.55 million barrels a day from 10.27 million in May, according to data Thursday from the Joint Organisations Data Initiative in Riyadh. Production climbed to a record 10.67 million barrels in July, the Organization of Petroleum Exporting Countries reported last week.
Saudi Arabia is engaged in a battle for market share with Iran and Russia and has cut prices to its customers in Asia while trying to serve growing demand at home as hot weather boosted power demand for cooling. Iran is pushing for an increase in production following the loosening of international sanctions in January. Its exports were little changed in June at 2 million barrels a day while output hovered above 3.6 million barrels a day, JODI data showed.
“The only way for Saudi Arabia to maintain oil exports and avoid loss of market share in the summer is to increase production,” Anas Alhajji , an independent oil analyst in Houston, said by phone Thursday. “Without record high production, the Saudis would lose market share” so they will keep boosting output for at least the rest of this year, he said.
Saudi Arabia’s exports in the first six months of 2016 averaged 7.52 million barrels a day, compared with 7.46 million barrels a day in the same period last year, JODI data show. Production for the period climbed to an average 10.29 million barrels a day from 10.14 million barrels a day.
While direct use of crude to produce energy for the Kingdom’s expanding population slightly fell in the first half from a year ago, demand from local refineries rose 17 percent during the same period. Power plants burned on average 474,000 barrels a day between January and June, down from 478,500 barrels a day a year earlier, the data showed. Refineries processed 2.49 million barrels a day compared with 2.14 million barrels a day last year.