Oil industry of Saudi Arabia
Map of oil industry
Crude Oil Production
Saudi Arabia is Top 3 the largest oil-producing countries in the world. After USA and along with Russia. Saudi Arabia is a member of OPEC, and its production volumes are primarily determined by its target revenue from oil exports, rather than its production capacity. Given Saudi Arabia's influence on international oil trade, higher production does not always equate to higher revenue.
As of March 2024, Saudi Arabia has the largest spare oil production capacity - 411 ktons per day. This voluntary underutilization of production capacity is due to OPEC+'s strategy of managing the oil market price. The country's key oil producer is the state-owned Saudi Aramco, one of the largest companies in the world across all industries. The country's key oil field is the super-giant Ghawar field. Almost all of the fields are located in the western, desert part of the country and in the Saudi sector of the Persian Gulf.
Saudi Arabia is currently developing the giant Jafurah gas field. Gas condensate exports from this field started in February 2026. Planned 2026 export volume (before the war) is 2 cargos per month. In the future, export volume will increase as Jafurah production will ramp up.
Crude Oil Exports
Total volume of exports in 2023 was - 320 million tons (877 thousand tons per day), which was 67% of the volume of production.
All Saudi oil fields are located on the coast of the Persian Gulf. In order to process oil near main Saudi cities on Red Sea coast, as well as to diversify oil exports during periods of tension in Persian Gulf, East-West pipeline was built in 1982 with a design capacity of 250 MTPA (according to other sources, the actual capacity as of 2025 has reached 350 MTPA), which is equivalent to 685 ktd (959 ktd). The pipeline is typically used at a third of its capacity. Two-thirds of the bandwidth is reserved.
Saudi Arabia receives 50% of oil loaded in Saudi Arabia - Kuwait neutal zone at Khafji and Mina Saud terminals.
Saudi Arabia is one of the largest holders of crude oil and petroleum product stocks in onshore storage facilities and offshore tankers. As of February 28, 2024, Saudi Arabia holds 12 million tons of crude oil and petroleum products, accounting for 2% of the global reserves. This places Saudi Arabia among the top ten countries in terms of marker stocks.
Saudi Aramco also actively establishes joint ventures for construction and management of refineries in countries that import Saudi oil (USA, China, South Korea, and others). Typically, a long-term contract for the supply of Saudi oil to these refineries is signed along with purchase of a stake in a foreign refinery.
Crude oil exports to USA
In USA, Saudi Aramco fully owns refining and petrroleum distrubution company Motiva Enterprises. This company owns one of the world's largest refineries in Port Arthur, Texas, with a processing capacity of 33 MTPA. Historically, Saudi Aramco owned a 50% stake (the remaining 50% was held by Shell USA) and supplied Saudi Arabian crude oil to this refinery at prices below market rates (5-11 dollars per barrel).
Since USA has become an net exporter of crude oil, this refinery is sole destination in USA for Aramco's crude oil.
Exports to South Korea
In South Korea, recipient of Saudi Arabian Light and Arabian Medium crude oil is Onsan Refinery Complex, which has a refining capacity of 29 MTPA. Saudi Aramco owns a 63.4% stake in S-Oil, which operates this refinery. Saudi Arabian crude oil accounts for 95% of the refinery's diet and is supplied under a twenty-year contract.
Export to China
Saudi Arabia supplies oil, including under a long-term contract with Zhejiang Petroleum and Chemical Company, which manages an oil refinery with a processing capacity of 40 MTPA. Annual supply under the contract is 24 million tons. Saudi Aramco owns a 10% stake in this refinery.
Crude Oil Refining and Burning of Oil
Refining
As of 2024, the capacity of Saudi refineries is 165 MTPA (452 ktd). It is equivalent to 38% of domestic crude oil production.
The refineries are located both on the western coast of the country in the Persian Gulf, near the main oil fields, and in the eastern part of the country and in Riyadh, near the main cities.
Saudi Arabia, represented by Saudi Aramco, actively involved Western oil companies in the construction of its refineries. Most of these refineries are still jointly owned.
In 2023 the refineries processed 135 million tons of crude oil (370 ktd). The utilization of refineries in 2023 was 86%.
Use of crude oil as fuel
In addition to processing, some of the oil is also burned in Saudi thermal power plants and desalination plants in its unprocessed form.
Volume of burning varies from 40 ktd during winter months to 90 ktd during hot summer. In the Middle East, peak demand for electricity occurs during the hot months (June - September), as demand increases due to the need for indoor air conditioning. In order to meet peak demand for electricity, oil burning at thermal power plants is increasing. Annual volume of oil burning at Saudi TPPs is approximately 24 million tons. In recent years, technical programs for the conversion of thermal power plants from crude oil to fuel oil have been implemented in Saudi Arabia and other Gulf countries.
The largest consumer of oil among desalination plants is the desalination plant in Shoaiba.
Consumption, export and import of petroleum products
Saudi Arabia is a major exporter of petroleum products.
Saudi Arabia is one of the leading suppliers of fuel oil to Egyptian thermal power plants. In this market, Saudi fuel oil competes with Russian and Iraqi fuel oil.
Saudi Arabia is also a major importer of petroleum products. As part of its commercial optimization efforts, Saudi Arabia has been actively importing fuel oil for combustion in its thermal power plants since 2022, replacing the use of oil. There has been a steady annual increase in fuel oil consumption. The profile of fuel oil imports exhibits pronounced seasonal patterns, aligning with the temperature schedule in Saudi Arabia. The high season occurs from June to September, with monthly imports reaching approximately 1.5 million tons (June-July 2024). The low season occurs from January to March, with monthly imports reaching approximately 600,000 tons. The key importers of fuel oil are Russia, Egypt, Bahrain, and the United Arab Emirates). For Russia, Saudi Arabia has become one of the leading fuel oil export destinations after Europe abandoned it.
Impacts of wars
Saudi Arabia's War against Yemen
12.05.2019 - drones attacked 4 tankers waiting to be loaded at port of Fujairah, UAE. Of these, two tankers were controlled by Saudi Aramco.
14.05.2019 - drones attacked two oil pumping stations on East-West crude oil pipeline. There was a fire at Pumping station 8.
19.05.2019 - drones attacked Shaybah NGL complex. No damage was reported.
19.05.2019 - drones attacked one of the world's largest oil fields, Shaybah. No damage was reported.
14.09.2019 - drones attacked the world's largest oil stabilization plant in Abkaiq. Oil treatment capacity is 350 MTPA (959 ktd), which is equivalent to 5% of global production. The plant temporarily stopped its operations and caused a price rally in international oil futures market.
14.09.2019 - drones attacked oil stabilization plant at Khurays field. The plant temporarily suspended its operations.
War in Middle East in 2024
As a result of the war in the Middle East, Saudi Aramco changed the oil supply scheme to its refinery and petrochemical plant in Jizan in 2024. This refinery, with a processing capacity of 20 million tons per year, is located directly next to Yemen and the areas controlled by Ansar Allah. Despite the de facto truce between Yemen and Saudi Arabia (it was Saudi Arabia that started the war against Yemen in the first place), the Saudi oil authorities have changed the oil supply scheme to the Jizan refinery and, as a result, its diet. Now oil is supplied with a terminal on the Red Sea coast, rather than from the Persian Gulf and accordingly tankers do not cross the Bab el-Mandeb Strait and the Gulf of Aden. This refinery, with a processing capacity of 20 MTPA, is located directly next to Yemen and areas controlled by Ansar Allah. Despite the de facto truce between Yemen and Saudi Arabia (it was Saudi Arabia that started the war against Yemen in the first place), the Saudi oil authorities have changed the way oil is supplied to the refinery in Jizan and, as a result, its diet. Now, oil is supplied from a terminal on the Red Sea coast instead of from the Persian Gulf, and as a result, tankers do not cross the Bab al-Mandeb Strait or the Gulf of Aden.
Israeli-USA war against Iran in 2026
02.03.2026 - attack on Ras Tanura refinery. 75 ktd refinery was damaged and suspended its operations.
11.03.2026 - attack on Shaybah oil field.
In mid-March, oil flows were redirected to be loaded by sea from Persian Gulf to Red Sea in port of Yanbu via East-West oil pipeline with a capacity of 685 kt per day (according to other data, 959 ktd after modernization). An armada of tankers is rushing to this port. Mostly VLCC and LR3 size.
19.03.2026 - as part of Iran's retaliatory strikes, it attacked SAMREF, JV of Saudi Aramco and ExxonMobil, which operates a refinery with a processing capacity of 20 MTPA (55 ktd). The refinery partially stopped its operations.
Notes:
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