Saudi Arabia was the world’s third-highest crude oil and condensate producer, the world’s top crude oil exporter, and OPEC’s top crude oil producer in 2022.1
Saudi Arabia is a key member of OPEC+, and in October 2022, Saudi Arabia and other OPEC+ members agreed to crude oil production cuts intended to rebalance the global oil market, hedge against downside risks of decreased oil demand, and raise falling crude oil prices.2 In May 2023, Saudi Arabia and several OPEC+ members further reduced crude oil production and extended cuts through 2024. Saudi Arabia voluntarily decreased oil production by an additional 1 million barrels per day (b/d) from July 2023 through December 2023, with possible extensions that depend on the status of the oil market.3
Saudi Arabia’s Vision 2030 supports extensive renewable energy and nonassociated natural gas development throughout the country and seeks to decrease oil- and associated natural gas-fired electricity generation in favor of renewable-sourced generation.4 Saudi Aramco expects Jafurah, the largest unconventional natural gas field in Saudi Arabia, to begin production in 2025, and the Saudi National Renewable Energy Program (NREP) expects renewable energy sources to account for 50% of generated electricity in Saudi Arabia by 2030.5
Petroleum and other liquids
Saudi Arabia produced 12.1 million b/d in total liquid fuels in 2022, up 12% from 10.8 million b/d in 2021.
Saudi Arabia produced 10.4 million b/d of crude oil in 2022, 14% higher than the 9.1 million b/d in 2021.6 This increase drives Saudi Arabia’s increased total liquid fuels production, reflecting a gradual reversal of OPEC+ production cuts from 2020.7
Saudi Arabia accounts for 43% (0.5 million b/d) of agreed on OPEC+ production cuts that began in May 2023 and extends through the end of 2024.8 Saudi Arabia will take an additional oil production cut of 1.0 million b/d from July through December 2023. We expect these oil production cuts to result in decreased crude oil production in Saudi Arabia for 2023 compared with 2022.9
Saudi Arabia produces five grades of crude oil: Arabian Heavy, Arabian Medium, Arabian Light, Arabian Extra Light, and Arabian Super Light. In general, the majority of Saudi Arabia’s crude oil is considered sour because its sulfur content is greater than 1%.10
Saudi Aramco plans to increase its maximum sustainable capacity for crude oil production by an estimated 1 million b/d, from Saudi Aramco’s reported capacity of 12 million b/d in 2022 to 13 million b/d by 2027. Large expansion projects for the Safaniya, Zuluf, Marjan, and Berri oil fields are scheduled to drive this increased capacity. All three are under construction or in engineering phases as of 2023.11
Saudi Arabia held 15% of the world’s proved oil reserves and an estimated 21% of OPEC’s proved reserves in 2022.12 Saudi Arabia’s reserves include Ghawar and Safaniya, the world’s largest onshore and offshore oil fields, respectively.13
Saudi Arabia consumed 3.6 million b/d in total liquid fuels in 2022, which was nearly 40% of Middle East consumption (9.9 million b/d). Saudi Arabia was estimated to be the largest per capita oil consumer in the world in 2022, not including major transshipment countries (such as the Netherlands and Singapore).14
Oil refining in Saudi Arabia occurs domestically and internationally through either wholly owned, joint, or affiliated refineries held by Saudi Aramco. Saudi Aramco reported that domestic production of refined oil products was 1.6 million b/d in 2020 (57% of Saudi Aramco’s global production). Saudi Aramco reported domestic refining capacity at 2.9 million b/d in 2020 (45% of the global capacity Saudi Aramco held) prior to the Jazan Refinery Complex opening in 2021. Jazan, located in southwest Saudi Arabia, increased domestic capacity by an additional 400,000 b/d in 2021, while throughput remained at 50%.15
Natural gas
Saudi Arabia meets natural gas consumption with domestic production and does not import natural gas. Natural gas production and consumption increased 2% from 4.0 trillion cubic feet (Tcf) in 2020 to 4.1 Tcf in 2021.16 Saudi Aramco expects domestic demand for natural gas to grow 3.7% per year from 2021 to 2030 because of increased demand for natural gas-fired power generation.17
Associated natural gas production in Saudi Arabia changes alongside increases or decreases in crude oil production, and it was 52% of Saudi Arabia’s total natural gas production in 2022.18 Saudi Arabia flared 66 billion cubic feet (Bcf) of associated natural gas in 2022 at an average intensity of 17 cubic feet per barrel (cf/b) of oil produced. The World Bank ranks Saudi Arabia as the 13th-largest natural gas flaring country for 2022, but the average intensity at which Saudi Arabia flared its natural gas was well below that of other top oil-producing countries.19
Nonassociated natural gas is a rising proportion of Saudi Arabia’s total natural gas production, increasing from 22% in 2012 to 48% in 2022. Increased production of nonassociated natural gas allows Saudi Arabia to meet domestic natural gas demand despite shifts in crude oil production that limit associated natural gas output. For example, the proportion of nonassociated natural gas peaked at 52% of Saudi Arabia’s total consumption in 2020 at a time when crude oil production declined significantly during the COVID-19 pandemic.20
Jafurah, the largest unconventional natural gas field in Saudi Arabia, contains 200 trillion cubic feet (Tcf) in estimated reserves of natural gas.21Located east of Ghawar, Jafurah is currently under development and is scheduled to begin production of nonassociated natural gas in 2025 and provide 2.0 Bcf/d of natural gas by 2030.22
Saudi Arabia seeks to begin exporting natural gas as part of Vision 2030.23 According to a 2016 analysis of Vision 2030’s natural gas development plans, Jadwa Investments estimates that average year-over-year increases in production will need to exceed 6.6% between 2020 and 2029 for Saudi Arabia to viably export natural gas.24
Electricity
Saudi Arabia generated an estimated 374 terawatthours (TWh) of electricity in 2022, up 2% from 367 TWh in 2021.25 In 2022, Saudi Arabia generated 67% of its electricity from natural gas (up from 60% in 2021), 33% from oil (down from 40%), and less than 1% from renewables (the same as in 2021).26
Increased electricity demand during the summer months in Saudi Arabia drove oil-fired power generation (crude oil and fuel oil) up 9% year over year, increasing from 1.0 million b/d in 2021 to 1.1 million b/d in 2022.27 Oil-fired power generation supplements Saudi Arabia’s natural gas-fired power to help meet demand for electricity. Despite minimal offsets from increased capacity to generate electricity from renewables and nonassociated natural gas, the demand for oil-fired power generation increased following declines in crude oil production and associated natural gas production.28
Doosan Enerbility and Korea Electric Power Corporation (KEPCO) are constructing the Jafurah Cogeneration Plant east of Riyadh, which is scheduled to come online in 2025.29 The plant’s production capacity, 320 megawatts, will supply power to the Jafurah natural gas field, which will ultimately supply natural gas for domestic electric power generation, water desalination, and steel production throughout Saudi Arabia.30
Water desalination accounted for 6% of electricity consumption in Saudi Arabia in 2020, and production of desalinated water in Saudi Arabia doubled from 1.1 billion cubic meters (Bcm) in 2010 to 2.2 Bcm in 2021.31 Saudi Arabia’s Saline Water Conversion Corporation (SWCC) is upgrading multiple desalination plants to reduce their energy consumption by 2024. New requirements for these plants call for less than 3 kilowatthours (kWh) per cubic meter of desalinated water, instead of the traditional 15 kWh. In total, the desalination plants receiving these upgrades account for 94% of Saudi Arabia’s desalinated water production.32
Renewable energy sources made up less than 1% of electricity generation in Saudi Arabia from 2018 to 2022.33 The Saudi National Renewable Energy Program (NREP) intends to increase this share to 50% by 2030 through several solar and wind projects.34 Saudi Arabia’s General Authority for Statistics reported 13 NREP projects as underway in 2020, and the Saudi Power Procurement Company (SPPC) announced a series of new agreements for wind projects and solar projects through 2022 and 2023.35 Additional updates for major projects include:
The Dumat Al Jandal wind farm began generating power in August 2021. It has the largest capacity of any wind farm in the Middle East, and it is the first wind farm in Saudi Arabia.36
The Sakaka solar project started operations in June 2021; it is the first utility-scale solar power project in Saudi Arabia.37
The Rabigh solar project in Makkah Province began operations in April 2023.38
Saudi Arabia’s ACWA Power and Water and Electricity Holding Company signed agreements for Al-Shuaiba 2 in November 2022; it will have the largest capacity of any single-site solar power plant in the world.39
Energy Trade
Saudi Arabia exported an estimated 7.3 million b/d of crude oil in 2022, up 13% from 6.5 million b/d in 2021 as a result of increased annual crude oil production. Saudi Arabia’s crude oil exports were 34% of all 2022 exports from OPEC members.41
According to customs data from Global Trade Tracker, countries in Asia were Saudi Arabia’s primary export market for crude oil and condensate. Countries in Asia received 79% of Saudi Arabia’s total annual exports in 2022, up from 72% in 2018 and subsequent years of steady year-over-year increases. China is Saudi Arabia’s top crude oil importer, accounting for 25% of 2022 exports, followed by Japan, South Korea, and India.42
Saudi Arabia imported 257,000 b/d of fuel oil in the first half of 2023, up 51% year over year from 171,000 b/d in the first half of 2022, driven by increased imports from Russia. Imports of fuel oil from Russia initially increased during the summer of 2022 to meet demand for power generation in Saudi Arabia. Substantially higher imports began in February 2023 because of discounted prices for fuel oil from Russia.43
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