Key Takeaways
- Crude oil exports from Saudi Arabia fell to a record low in May, down 17.9% month-on-month.
- The decline is attributed to the U.S.-Iran conflict and increased domestic crude burning.
- Saudi Arabia’s refinery throughput rose by 0.175 million bpd in May.
Crude oil exports from Saudi Arabia fell for a third consecutive month, reaching their lowest level since records began in 2002, according to data from the Joint Organizations Data Initiative (JODI). In May, exports dropped to approximately 3.434 million barrels per day, marking a significant decline of 17.9% compared to April’s figure of 3.986 million bpd.
The reduction in exports is largely attributed to the ongoing U.S.-Iran conflict, which has disrupted shipments across the Gulf region. Additionally, higher domestic crude burning by Saudi Arabia has further limited its export capacity. The country's crude oil production rebounded slightly in May, reaching 6.560 million bpd after hitting a record low of 6.316 million bpd in April.
Despite the decrease in exports, Saudi Arabia’s refinery throughput increased to 2.386 million bpd from 2.211 million bpd in April, with direct crude burning rising by 107,000 barrels per day to 647,000 barrels per day.
Geopolitical tensions continue to escalate, as Yemen’s Houthis announced a naval blockade against Saudi Arabia, potentially exacerbating the situation. The Saudi foreign ministry has strongly condemned these allegations and stated it will take necessary measures to protect its ships.
The International Energy Agency (IEA) predicts that global oil supply will expand by 7.5 million barrels per day next year after a contraction of 3.7 million bpd this year, contingent on increased traffic through the Strait of Hormuz. However, the ongoing conflicts and blockades pose significant risks to these projections.
In related news, Pakistan’s non-textile exports experienced a decline in fiscal year 2025-26 (FY26), falling by 13.77% to $12.21 billion from $14.16 billion the previous year. The agriculture sector was particularly affected, with export earnings dropping 29.49% to $5.02 billion compared to $7.12 billion in FY25.
Engineering goods showed a modest increase of 5.64%, driven by stronger shipments of industrial machinery, transport equipment, electric fans, auto parts, and rubber tyres. Cement exports also demonstrated resilience with an export value up 4.02% on a year-on-year basis. However, the quantity of cement exported decreased by 4.07%. Footwear exports experienced a mixed performance, with overall footwear exports dipping by 0.47%, while other footwear categories saw a significant increase of 33.02%.
The decline in non-textile exports highlights the challenges faced by key sectors, particularly agriculture, which has been impacted by softer international prices and weakening demand from major markets.
The drop in Saudi exports was likely still influenced by the conflict in the Middle East, but higher domestic crude burn is likely another factor limiting crude exports.
Giovanni Staunovo, UBS analyst
