Saudi Arabia used less crude oil for power generation in 2018

Decorative image

Saudi Arabia reported burning an average of 0.4mn b/d of crude oil for power generation in 2018, the lowest amount since at least 2009, the earliest year that data is available from the Joint Organization Data Inititiative (JODI), reports the US Energy Information Administration (EIA). Saudi Arabia burns more crude oil directly for power generation than any other country. Between 2015 and 2017, it used more than three times the amount of crude oil for power generation than Iraq, the second-largest user of crude oil for power during those years.

Despite steady increases in both population and electricity consumption, Saudi Arabia has reduced its reliance on crude oil for power generation by increasing the use of other energy sources, such as natural gas and fuel oil. Most of the natural gas that the country produces is associated gas. Yet Saudi Arabia’s production of natural gas from wells not associated with oil production has also increased, leading to higher consumption of natural gas in the country.

Natural gas processing capacity is also increasing. Consumption of natural gas in Saudi Arabia reached 10.6bn cf/d in 2017.

In addition to natural gas, Saudi Arabia has also been using fuel oil as a partial replacement of crude oil in power generation. The country’s fuel oil consumption has increased despite fuel oil consumption declining in most regions of the world  because of environmental concerns and competition with other fuels, notes the EIA. Some media reports suggest that one potential side effect of the upcoming changes to the sulphur limits in marine fuels in 2020 is that the stranded high-sulphur fuel oil could be sent to Saudi Arabia to further replace crude in power generation. 

With less crude oil directly used for power generation, more crude oil is available for Saudi Arabia’s refining and exports. For many years, Saudi Arabia has worked to increase it domestic refinery capacity and is currently able to process 2.9mn b/d of crude oil. Crude oil refinery runs averaged 1.8mn b/d in 2009, and they subsequently rose to an average of 2.6mn b/d by 2018, according to JODI data. As a result of increased refinery runs, Saudi Arabia also increased the amount of petroleum products it could export and most recently exported an average of 2mn b/d of petroleum products in 2018, reports the EIA.

Figure 1: Saudi Arabia direct use of crude oil for electricity generation, 2013-2017, in mn b/d
Source: EIA,JODI

News Item details

Please login to save this item