Saudi Arabia's Plan to Increase Daily Oil Exports to 15 Million Barrels

Saudi Arabia's state oil company, Aramco, has planned to repair and launch its oil terminal in the Red Sea next year, thereby increasing the country's oil loading and export capacity to 15 million barrels per day. According to Reuters, this oil terminal was previously used for transporting Iraqi oil through a pipeline in Saudi Arabia and for its export, but it has not been used since Saddam Hussein's invasion of Kuwait in 1990. The pipeline was confiscated by Saudi Arabia in 2001 as compensation for Iraq's debts. Until 2012, Saudi Arabia used this pipeline for several years to transfer gas to power plants in the west of the country, allowing Riyadh to conduct a significant portion of its oil exports through it in case the Strait of Hormuz was closed by Iran. Iran, which is Saudi Arabia's main rival in the region, had previously threatened to close the shipping route of the Strait of Hormuz, which accounts for 40% of global oil exports by sea, in response to sanctions imposed by the West on its oil industry in 2012. According to Mohammed Al-Qahtani, Senior Vice President of Aramco, the re-launch of the mentioned terminal next year will increase Saudi Arabia's daily oil loading capacity from the current 11.5 million barrels to 15 million barrels. This project will enable Aramco to meet customer needs and maintain its ability to export oil from the western coast of the country. According to the U.S. Energy Information Administration, Saudi Arabia currently has three oil export terminals, including the Ras Tanura port in the Persian Gulf with an average daily capacity of about 3.4 million barrels, through which a significant portion of the country's oil exports is conducted. The Ras Al-Ju'aymah facility in the Persian Gulf has a loading capacity of about 3 million barrels per day and can accommodate the largest oil tankers. The Yanbu terminal in the Red Sea, which exports a significant portion of the remaining oil, has a daily loading capacity of 1.3 million barrels. Saudi Arabia is the world's largest oil exporter, but reports indicate that the reduction in the country's oil production in line with the OPEC production cut agreement has led to an increase in U.S. oil production. In this context, Bloomberg reported that the sharp expansion of activities in the U.S. shale oil sector has raised doubts among investors about the future trend of crude oil prices. Shale oil producers in Texas have been leading the revival of the shale industry since 2011 and have posed challenges to OPEC's efforts to restore balance to the market. According to the U.S. Energy Information Administration's forecast, shale oil production in the U.S. this month is expected to reach 5.2 million barrels per day, the highest level since November 2015. Mohammed Barkindo, the Secretary General of OPEC, announced last week that all member countries have committed to reducing production ceilings, and Russian Energy Minister Alexander Novak stated that his country will adhere to its commitment to reduce production by 300,000 barrels per day.