News / Middle East

Demand for Saudi Oil to Grow in Coming Months

Saudi Arabian Oil Minister Ali Al-Naimi (L) attends the First Gulf Cooperation Council Petroleum Media Forum in Kuwait City, March 25, 2013.Saudi Arabian Oil Minister Ali Al-Naimi (L) attends the First Gulf Cooperation Council Petroleum Media Forum in Kuwait City, March 25, 2013.
x
Saudi Arabian Oil Minister Ali Al-Naimi (L) attends the First Gulf Cooperation Council Petroleum Media Forum in Kuwait City, March 25, 2013.
Saudi Arabian Oil Minister Ali Al-Naimi (L) attends the First Gulf Cooperation Council Petroleum Media Forum in Kuwait City, March 25, 2013.
Reuters
Demand for Saudi crude is likely to rise over the next few months, Saudi oil minister Ali Al-Naimi said on Monday, in a sign that the world's largest oil exporter sees a recovery in its biggest export market, Asia.

State-run Saudi Aramco cut production sharply in the fourth quarter of last year because of weak economic growth abroad and lower seasonal demand for oil for power generation at home.

It kept oil output steady at around 9.05-9.15 million barrels per day [bpd] in January and February, but industry sources have said exports could rise in the second quarter, driven by Asian demand.

Naimi confirmed on the sidelines of an industry event in Doha on Monday that he expected external demand for Saudi crude to rise over coming months, but said it remained to be seen by how much.

China's factory activity rebounded in March in a sign that its underlying economic recovery is strong enough to weather any uneven export periods, surveys showed on Monday.

China imported 1.08 million barrels a day of crude from Saudi Arabia in 2012, up 7.24 percent from 2011, and state-run CNPC expects China's total net imports to rise again in 2013.

Saudi Arabia, OPEC's leading producer and holder of the world's only significant spare capacity, slashed its output by around 700,000 bpd over the last two months of 2012, helping drive a rise in crude prices from early December to February.

Long-term outlook

With Europe wallowing in debt and the United States consuming more of its own oil, demand from Asia has become the main driver of oil exports from producers in the Gulf Cooperation Council [GCC] over the last decade.

Asia collectively bought more than three times as much Saudi crude in 2011 as buyers in North America, and five times more than Europe, according to Saudi government data.

Rapid population growth in Asia, and a booming middle class in China in particular, is likely to see ever more Saudi crude head east as European and U.S. oil import demand wanes.

"For decades, GCC energy supplies helped support economic growth in the U.S. and across Europe... We have done the same in Asia, supplying energy to help fuel its increasing growth and prosperity," Naimi told the Brookings Doha Center.

"It is thanks to Asian demand and GCC energy supplies that our region's combined GDP is at an historic high - and that economic growth remains strong," he said, pointing to population growth as a firm driver for future demand.

OPEC oil producers have played down the potential threat of a surge in North American shale oil production over the last few years, arguing that more supplies are good for price stability.

"I, for one, welcome all new energy sources to the market. I don't think anyone should fear new supplies when set against increasing global demand," Naimi said, according to a copy of his speech in Doha sent to the media.

"More companies and nations are competing for their slice of the energy pie. That's true. But the pie is getting bigger and there is enough to go around."

You May Like

Multimedia Obama Defends Immigration Action

Obama says with his executive action on immigration, enforcement resources will be focused on 'felons, not families; criminals, not children' More

US-Led Airstrikes in Syria Kill Over 900: Monitoring Group

British-based Syrian Observatory for Human Rights says the toll includes more than 50 civilians, five of them women and eight of them children More

Report: Obama Broadens US Combat Role in Afghanistan

The New York Times says resident Barack Obama has signed a classified order extending the role of US troops in Afghanistan for another year More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
New Skateboard Defies Gravityi
X
November 21, 2014 5:07 AM
A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Gay Evangelicals Argue That Bible Does Not Condemn Homosexuality

More than 30 U.S. states now recognize same-sex marriages, and an increasing number of mainline American churches are blessing them. But evangelical church members- which account for around 30 percent of the U.S. adult population - believe the Bible unequivocally condemns homosexuality. VOA's Jerome Socolovsky reports that gay, lesbian, bisexual and transgender evangelicals are coming out. Backed by a prominent evangelical scholar, they argue that the traditional reading of the bible is wrong.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Mexico Protests Escalate Over Disappearances

Protests in Mexico over 43 students missing since September continue to escalate, reflecting growing anger among Mexicans about a political system they view as corrupt, and increasingly tainted by the drug trade. Mounting outrage over the disappearances is now focused on the government of President Enrique Pena Nieto, accused of not doing enough to end insecurity in the country. More from VOA's Victoria Macchi.
Video

Video US Senate Votes Down Controversial Oil Pipeline - For Now

The U.S. Senate has rejected construction of a controversial pipeline to transport Canadian oil to American refineries. The $5 billion project still could be approved next year, but it faces a possible veto by President Barack Obama. As VOA’s Michael Bowman reports, the pipeline has exposed deep divisions in Congress about America’s energy future.
Video

Video Can Minsk Cease-fire Agreement Hold?

Growing tensions between government troops and separatists in eastern Ukraine further threaten a cease-fire agreement reached two months ago in the Belarusian capital of Minsk. Critics of U.S. policy in Ukraine say it is time the Obama administration gives up on that much-violated cease-fire and moves toward a new deal with Russia. VOA's Scott Stearns has more.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.
Video

Video Ferguson Church Grapples with Race Relations

Many white residents of Ferguson, Missouri, say they chose to live there because of the American Midwest community's diversity. So, they were shocked when a white police officer killed an unarmed black teenager in August – and shaken by the resulting protests and violence. Some local churches are leading conversations on how to go forward. VOA’s Ayesha Tanzeem reports.

All About America

AppleAndroid