Saudi Arabia Boosts Oil Imports to Meet Scorching Summer Demand
Introduction
As the summer heat wave hits Saudi Arabia, the country is increasing its imports of fuel oil to meet the surge in demand for electricity to power air conditioners. According to market researchers Kpler and Vortexa, shipments of fuel oil rose to the highest level in over three years in June, and are expected to remain elevated this month.
Fuel Oil Imports Soar
Fuel oil imports have risen significantly since March, with purchases increasing by as much as fourfold to around 350,000 barrels a day. Saudi Arabia is the region’s largest buyer of fuel oil, a type of dirty product that is left over after refineries produce transport fuels like gasoline and diesel. The kingdom also burns crude oil directly to produce electricity, which has contributed to a drop in its exports to a 10-month low.
Summer Heat Wave Drives Demand
Temperatures in Riyadh have been hovering in the mid-40Cs this week, and can reach as high as 50C (122F) in the summer. The heat drives demand for electricity to power air conditioners, which in turn forces the kingdom to burn more oil. Saudi Arabia’s power demand is expected to remain high throughout the summer, with the kingdom’s state oil producer, Saudi Aramco, handling oil shipments for the kingdom.
Aims to Stop Burning Liquid Fuels
Saudi Arabia aims to stop burning liquid fuels for power this decade as it targets net zero emissions by 2060. Crown Prince Mohammed bin Salman has pledged to ramp up solar and wind generation, and state oil producer Saudi Aramco has signed $25 billion contracts to pump natural gas from the Jafurah field for use in power plants. The company plans to provide enough gas to replace all the liquid fuel in power plants by 2030, freeing up roughly 1 million barrels a day of crude used domestically in the summer months for exports.
Fuel Oil Imports by Country
Saudi Arabia buys most of the fuel oil that Iraq and Bahrain produce, while also importing cargoes from the United Arab Emirates. In April, the kingdom resumed purchases from Russia after a five-month pause. Supplies from there have nearly doubled since then, although are still below the levels of last summer.
Conclusion
In conclusion, Saudi Arabia’s fuel oil imports have soared to meet the surge in demand for electricity to power air conditioners during the scorching summer heat wave. The kingdom aims to stop burning liquid fuels for power this decade and is investing in solar and wind generation to achieve its target of net zero emissions by 2060.
FAQs
Q: Why is Saudi Arabia increasing its fuel oil imports?
A: Saudi Arabia is increasing its fuel oil imports to meet the surge in demand for electricity to power air conditioners during the scorching summer heat wave.
Q: What is fuel oil?
A: Fuel oil is a type of dirty product that is left over after refineries produce transport fuels like gasoline and diesel.
Q: Why is Saudi Arabia burning crude oil directly to produce electricity?
A: Saudi Arabia is burning crude oil directly to produce electricity to meet the surge in demand for power during the summer months.
Q: What are Saudi Arabia’s plans to reduce its reliance on liquid fuels?
A: Saudi Arabia aims to stop burning liquid fuels for power this decade and is investing in solar and wind generation to achieve its target of net zero emissions by 2060.
Q: Who is Saudi Arabia’s largest supplier of fuel oil?
A: Saudi Arabia’s largest suppliers of fuel oil are Iraq and Bahrain, although the kingdom also imports cargoes from the United Arab Emirates and Russia.
Author: fortune.com
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