Saudi Oil Exports Dropped in March: down from 7.307 to 7.235 mbd

Saudi oil exports fell in March 2022
The crude oil exports from Saudi Arabia, the world's largest exporter of the commodity, have fallen from 7.307 to 7.235 mbd in March, according to the data provided by the OPEC on regular basis.

The fall is significant in light of the war in Ukraine, because analysts expected a steep spike from the Kingdom, when it comes to crude oil exports; it did not happen, though.

The unexpected development sheds some light on the reluctance on Saudi's part to increase the production in order to bring the prices down that wreck havoc in the global economy as a whole; by doing so, it is clearly on the crosshairs of its greatest Western ally, the US.

On the other hand, as Saudi Arabia exports most of its crude oil to Asia, the drop also ominously reflects the collective state of the economy in the region too; the precarious situation in Sri Lanka and the worsening economic situation in Pakistan are two grim reminders of the current situation that could get worse before getting better at some point.

Saudi Arabia is not the only Middle Eastern oil producer that saw its most important, corresponding export falling during the same period; Kuwait, the tiny gulf country, saw its crude oil exports dropping from 1997 to 1890 mbd in March as well.

Analysts, in this context, fear the economic state at present in major Asian countries such as China and Japan that get the bulk of Middle Eastern oil, apart from the United States.

The oil exports from Norway, by contrast, have gone up from 1533 to 1699 mbd in March, clearly showing the fact some Europeans nations may have turned to the Scandinavian nation for their needs, clearly shunning Russia over the war.

Since data for April is not available at present, it is difficult to gauge the trend since the war in Ukraine.

The data, however, does not help dampen the gloomy mood over the global economy as the dreaded, 'R' word is now on the lips of the experts across the word, ranging from central bankers to seasoned analysts.

As the Europeans haggle over a collective response in banning Russian gas imports, there is no end in sight for the energy crisis in Europe, something that they cannot drag on until autumn - or beyond; there are already cracks in the EU over the issue and they can only get wider in inverse proportion to the falling temperatures in the coming months.

Some countries are resorting to harsher measures to mitigate the impact and nipping the potential social unrest in the bud. Germany, for instance, is said to be planning to ration the gas supplies - as the last resort.

Although the EU made a decision not to be 'blackmailed' by Russia, the European gas companies have started paying for Russian gas in rouble in line with Russian demand - and in droves.

Having firmly grasped the leverage that Russia has over its customers, the former has stopped the flow of gas to Finland; how Finland responds to it remains to be seen.

In retrospect, EU could have exempted Russian gas from the list of sanctions as there is no substitute to turn to - at short notice. 

Qatar, the world's largest LNG, liquified natural gas exporter, up until recently, warned in February that the former cannot become a substitute for Russian gas - as a warning. 

The EU should have taken it on board while formulating a collective response to the unacceptable invasion of sovereign Ukraine by Russia using its military might.




 

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