• 9 hours Oil Majors Beat Back $4.2 Billion Fine in Kazakhstan
  • 11 hours OPEC+ Nears Decision Point on Next Oil Output Hike
  • 12 hours Enbridge Books Record Core Earnings on Power and Gas Demand
  • 13 hours Record Permian Output Boosts Exxon's Q2 Results
  • 14 hours Chevron Tops Profit Estimates on Record-High Oil and Gas Output
  • 15 hours Sanctioned Russian Oil Ships Await Clarity Off Indian Coast
  • 16 hours Pakistan Strikes Oil in Sindh Province
  • 17 hours Pakistan Buys First U.S. Oil Cargo After Trade Deal
  • 19 hours China's Solar Sector Has Slashed 87,000 Jobs Since 2024
  • 20 hours Chevron’s Return to Venezuela Fuels Controversy Over Oil Payments to Maduro
  • 21 hours Court Slams Phillips 66 With Trade Secrets Fine
  • 1 day U.S. Crude Oil Output Set New Record in May: EIA
  • 1 day EU Eyes Group LNG Buys To Meet US Commitments
  • 1 day Oil Giant Sinopec Opens New Shale Play in China
  • 1 day AI Boom Will Drive U.S. Energy Expansion, Says Interior Secretary Burgum
  • 2 days New Zealand Lifts Offshore Oil and Gas Exploration Ban
  • 2 days Asian Refiners Pivot to U.S. Crude as Middle East Prices Surge
  • 2 days Non-Oil Growth Drives Saudi Economic Expansion in Q2
  • 2 days Shell Defies Expectations With Strong Q2 Earnings
  • 2 days U.S. Steps Up Sanctions on Chinese Imports of Iranian Oil
  • 2 days U.S. Gives Chevron Green Light to Return to Venezuela
  • 2 days Oil Exports From Brazil to the U.S. Resume on Tariff Exemption
  • 2 days U.S. and Pakistan Seal Oil Development Deal
  • 2 days Trump Announces Trade Deal With South Korea
  • 2 days Barclays Warns Traders against Chasing High Oil Prices
  • 2 days Indian Refiners Pause Procurement After Trump Targets Russian Crude Flows
  • 2 days $70 WTI Returns as Trump Targets India Over Russian Oil Ties
  • 2 days Sakhalin LNG, Oil Terminals Stable After Russian Quake, Tsunami Alert
  • 3 days EU Sanctions Hit Petroleum Sales of Russia-Linked Indian Refiner
  • 3 days Microsoft Reinstates Services to Sanctioned Indian Refiner
  • 3 days Kazakhstan Eyes Increased Oil Exports via BTC Pipeline
  • 3 days AI Drives Surge in Panasonic’s Battery Unit Profit
  • 3 days Glencore Aims for $1 Billion Cost Savings in the Near Term
  • 3 days Tesla Inks $4.3 Billion Battery Deal With LG Energy
  • 3 days Mexico Issues $12 Billion in Debt to Prop Up Pemex
  • 3 days LNG Canada Runs Into Technical Problems
  • 3 days Oil Prices Remain Elevated as Traders Brace for Volatile Week
  • 3 days U.S. Crude Stocks Rise Against Forecasted Draw
  • 3 days Trump Says 'We’ll Just Step It Up'—But Can U.S. Oil Deliver?
  • 3 days Floating LNG Becomes Superstar in Global Gas Markets
Europe Wants More U.S. Gas Than Exists

Europe Wants More U.S. Gas Than Exists

Despite record LNG exports and…

Oil Falls Below $70 as Sentiment Sours

Oil Falls Below $70 as Sentiment Sours

A poor U.S. jobs report…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Record Refining Helps Saudi Oil Income amid Crude Price Decline

  • Saudi Arabia is offsetting some oil revenue losses from falling crude prices by ramping up refinery operations and exporting record-high volumes of refined petroleum products.
  • Despite higher refining income, the Kingdom faces a soaring budget deficit.
  • The government is relying on debt to cover deficits and may be forced to scale back major investment projects like NEOM if low oil prices persist.
refinery

Saudi Arabia’s oil revenues have been suffering from the oil price slump during the second quarter. But there’s a silver lining in falling crude prices – profits from refining the crude rise with cheaper feedstock.

While Saudi Arabia has been restricting crude oil production and exports as part of the OPEC+ deal, it has been running refineries at near-record levels this year and exporting record-high volumes of refined petroleum products.

Stronger refining margins and higher exports of petroleum products have generated more income for the Kingdom, partly offsetting some revenues lost due to the lower crude exports and the crash in oil prices, Reuters energy columnist Ron Bousso notes.

More profits from refined products cannot offset the lost revenues from crude, but they are a welcome reprieve at a time of soaring budget deficit for the world’s top crude oil exporter.

Saudi Arabia’s crude oil production inched up by 10,000 barrels per day (bpd) in March to a five-month high of 8.957 million bpd, according to the latest data from the Joint Organizations Data Initiative (JODI).

Domestic refinery intake, on the other hand, jumped by 323,000 bpd to a 10-month high of 2.944 million bpd, according to the JODI database, which compiles self-reported figures from individual countries.

The March refinery output was a few barrels below the record high of 2.96 million bpd that Saudi Arabia saw in April 2024.

The refinery intake in March was also significantly higher compared to the 2020-2024 range, JODI data showed.

In March, Saudi crude oil exports slumped by 793,000 bpd to 5.754 million bpd, per JODI data. But refined product exports jumped to a record high of 1.58 million bpd, per data from Kpler cited by Reuters’s Bousso.

Related: LNG Slowdown in Asia Masks a Bigger Surge Ahead

Saudi fuel exports fell to below 1.5 million bpd in April and to 1.42 million so far in May, according to data from Kpler.

The observed decline in product exports in recent weeks has been likely a result of refinery maintenance ahead of the peak demand season in the northern hemisphere.

Strong fuel demand and refining margins this summer would help Saudi Arabia cut some of its losses from the slide in crude oil prices.

Going all-in on a war to reclaim market share, as indications from OPEC+ currently are, the Saudis appear willing to continue enduring lower crude oil prices.

However, with a budget breakeven oil price estimated at about $90 per barrel, the world’s top crude oil exporter will be running a much higher deficit this year than previously expected.

The Kingdom already booked a hefty budget deficit for the first quarter, even before oil prices plunged in April.

Saudi Arabia’s budget deficit jumped to $15.6 billion (58.7 billion Saudi riyals). That’s already more than half of the deficit the Kingdom had forecast for the full year—a deficit of $27 billion (101 billion riyals).

The second-quarter deficit will be even higher than in Q1, as oil prices have languished in the low $60s per barrel Brent since they crashed in early April.

All the deficit in the first quarter was covered by borrowing, suggesting that Saudi Arabia prefers to continue tapping debt markets to using central bank foreign currency reserves.

With oil at $60-$65 per barrel, Saudi Arabia may have to accelerate borrowings and defer planned investments in its mega initiatives such as the futuristic city of Neom, analysts say.

Last week, Saudi Minister of Economy and Planning, Faisal Alibrahim, said that the Kingdom is always ready for multiple oil price scenarios.

“We have the long-term fiscal planning and medium-term frameworks that help us adjust depending on what scenario actually plays out,” Alibrahim said at the Qatar Economic Forum in Doha.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com


Download The Free Oilprice App Today
Download Oilprice.com on Apple Download Oilprice.com on Android

Back to homepage



ADVERTISEMENT



Leave a comment
  • Mamdouh Salameh on May 29 2025 said:
    While Saudi Arabia is offsetting some oil revenue losses from falling crude prices by ramping up refinery operations and exporting bigger volumes of refined petroleum products, this hardly changes the Saudi oil situation. The Kingdom is still facing a soaring budget deficit.

    The reason is that both Saudi production and exports have been in a steady decline because of fast-depleting reserves and ageing giant oilfields discovered 77 years ago and being kept in production by the injection of millions of gallons of water.

    That is why the government is relying on debt to cover deficits and may be forced to scale back its major investment projects for the diversification of the economy if low oil prices persist.

    And yet, Saudi-led OPEC+ decided to roll back its voluntary production cuts the third increment of which is 411,000 barrel a day (b/d) starting July.

    The Kingdom already booked a hefty budget deficit for the two quarters. All the deficit in the first quarter was covered by borrowing, suggesting that Saudi Arabia prefers to continue tapping debt markets to using central bank foreign currency reserves.

    Still I believe that OPEC+'s decision to roll back its cuts is a hugely flawed decision verging on blunder when the Brent crude oil price is hovering around lower $60s and when the minimum Brent price the majority of its members needs is balance their budgets is $85 a barrel with Saudi fiscal breakeven price is $91.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News