Saudi Arabia’s Crude Oil Exports Reach Three-Month High, While Demand Forecasts Shift in China

Saudi Arabia’s crude oil exports surged to a three-month high in October, with the Kingdom shipping 5.92 million barrels per day (bpd), marking an increase of 174,000 bpd from September, according to the latest data from the Joint Organizations Data Initiative (JODI). As the world’s largest crude oil exporter, Saudi Arabia has maintained a steady supply of oil to its customers, despite global challenges in oil demand.

This rise in export volume is seen as a significant rebound, reflecting a temporary peak in Saudi Arabia’s crude shipments. However, Saudi Arabia’s overall production slightly declined by 3,000 bpd to 8.972 million bpd in October, consistent with the Kingdom's commitment to maintaining production at around 9 million bpd.

Crude oil refinery runs also decreased slightly, down to 2.737 million bpd, while direct crude burning for power generation continued its downward trend following the end of the hotter months in the desert Kingdom. Direct crude burn fell by 156,000 bpd to 362,000 bpd.

OPEC+ Production Cuts and Global Oil Market Challenges

Despite its strong export performance, Saudi Arabia is continuing to shoulder a major burden of the OPEC+ production cuts. The Kingdom is cutting an additional 1 million bpd in a unilateral move, which is part of the broader OPEC+ agreement to reduce production by 2.2 million bpd. However, the impact of these cuts has been dampened by weaker-than-expected demand, especially from China.

Earlier this month, OPEC+ decided to delay the easing of these cuts, pushing the timeline for starting production increases to April 2025, with a full unwinding of the cuts extended to September 2026. These decisions are made in response to challenges in the global oil market, including weaker demand growth projections and increasing supply from non-OPEC+ producers, such as the U.S., Brazil, and Guyana.

Meanwhile, a shift in global oil demand is emerging from China, the world’s largest oil importer. Sinopec, one of China's state-owned energy giants, has predicted that China’s oil demand will peak in 2027, reaching 16 million bpd (or 800 million metric tons annually). This forecast is more specific than last year’s estimate, which anticipated the peak between 2026 and 2030.

The slowing demand growth is attributed to a combination of factors, including weaker economic performance and China’s growing adoption of electric vehicles (EVs) and LNG-powered trucks. By 2035, it is predicted that half of the cars on Chinese roads will be electric, further dampening demand for road fuel like gasoline.

Additionally, some experts, like Vitol Group CEO Russell Hardy, believe that gasoline demand in China may peak as early as this year or next, driven largely by the country’s shift to electric vehicles.

Despite these shifts in demand, China remains a major driver of global oil prices and will continue to exert influence on the market, whether its demand peaks in the near future or continues its growth. At the same time, non-OPEC+ producers are expanding their supply, potentially eroding OPEC’s market share in the coming years.