Saudi Arabia reduces your record-breaking oil reserves amid rising domestic demand, according to The Wall Street Journal. In may of this year, the oil reserves in the Kingdom dropped to the lowest level since August 2014, according to data of international organisations Joint Organisations Data Initiative (JODI). Inventory levels since October last year fell by 12% to 289 million barrels, showing the longest decline in the past 15 years.
According to analysts interviewed by the WSJ, so Saudi Arabia is trying to maintain the delicate balance in a difficult oil market. The Kingdom wants to increase production to meet growing domestic demand. Otherwise, this would signal to investors that the global overstocking of the market will not stop in the near future. The volume of production in Saudi Arabia remained stable from August 2015, it varies between of 10.14 million and 10.28 million barrels per day after a significant growth in early 2015.
However, Riyadh is committed to maintain the level of exports to maintain their global market share against such competitors as Iran, Russia and recently USA.
In may, the Kingdom exported nearly 7.3 million barrels per day, increasing their exports by more than 5% compared to may 2015.
“If Saudi Arabia do not spend the reserves, it would have to cut exports at a time as Iran increases exports,” — said the publication Petromatrix analyst Olivier Jakob.
Source WSJ in Saudi industry, familiar with the matter said that the Kingdom is likely to continue to spend its reserves and not to increase production to meet the peak domestic demand, which is in the summer. To meet domestic energy needs in recent years spent an increasing proportion of locally produced oil, in 2015 it should be up to 25% of the total production.
Earlier, in late June, JODI reported that in April 2016 Riyadh cut oil exports to 6-month low. As explained by Bloomberg, the reason for this was the seasonal decrease in fuel procurement by foreign factories, which Saudovskaya Arabia was forced to spend the released oil reserves for domestic consumption.