Saudi Arabia Regains Position as World’s Biggest Oil Exporter
Successfully overcoming months of oil market volatility, Saudi Arabia has regained its position as the world’s biggest oil exporter once more, surpassing the US. The US had overtaken the Kingdom, acquiring the top position during the middle of last year. This is based on the assessment of Middle East Economic Survey, which published the figures compiled by industry experts.
The COVID-19 pandemic forced countries across the globe to announce lockdowns in order to save people. This resulted in a sharp, worldwide slump in demand for oil. Experts from the oil and petroleum industry reported that in April, even as oil prices slashed due to lockdowns, Saudi Arabia exported a record 11 million barrels of oil per day. During the same time, the US exported only about 8.6 million barrels. Major oil exporters of the world had agreed to cut oil output during the historic OPEC+ deal. Despite the resultant fall in exports in May, Saudi Arabia was still way ahead of the US.
The OPEC+ alliance’s joint ministerial monitoring committee will meet soon to assess the members’ compliance with agreed cuts. It is also being speculated that the cuts may be extended for one more month.
Experts opine that the Kingdom will retain its position for most of 2020 given the fact that American production suffers from shut-ins and bankruptcies in its price-sensitive shale oil operations. After the US benchmark- West Texas Intermediate- collapsed in April, many shale producers have cut back on their rig count.
A report from the International Energy Agency (IEA) says that the fall in oil demand in 2020 will be less than what is expected. It predicts that the demand would be 91.7 million barrels per day, which will still be the biggest fall till date. It also noted that the demand from India and China was on the rise and despite a volatile market, the modest rise in demand was reason enough to be hopeful of relatively brighter times ahead.
Signaling a better demand and recovery, Brent crude, the global benchmark, reached above $40, whereas the West Texas Intermediate stood at $37. In this regard, it also said that initiatives like the OPEC+ agreement and the meeting of G20 energy ministers have made a major contribution to restoring stability to the market, infusing positivity during the grim situation.