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Saudi Arabia received an “unanticipated” $326 billion in oil revenues in 2022. How much oil does Saudi Arabia produce?

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Saudi Arabia oil revenues

At the end of the year, Saudi Arabia received unexpectedly large revenues from oil sales to foreign countries. Despite some of the lowest monthly revenues in December, Riyadh’s economy grew 8.7 percent, the largest increase among G20 countries, Bloomberg reported, citing data from the kingdom’s General Statistics Office. How much oil does Saudi Arabia produce?

Saudi Arabia oil revenues

The high income of Saudi Arabia from crude oil exports is more unexpected because its oil revenues have been declining for the sixth month in a row. But the second-largest “unexpected” profit in the kingdom’s history gives Crown Prince Mohammed bin Salman more cash to diversify the national economy and gradually move away from his heavy reliance on commodity exports, the article specifies.

“With oil prices ending last year around $80 a barrel after rising sharply to triple digits, Saudi Arabia received 85.5 billion rials ($22.8 billion) in December from exports of crude oil and refined products. Although monthly receipts were the lowest in nearly a year, oil revenues reached nearly $326 billion in 2022,” the story said.

On December 25, the website of Saudi Arabia’s statistical office reported that the kingdom’s oil revenues reached 95.796 billion rials ($25.5 billion) in October 2022. The figure was the lowest since February. By comparison, Riyadh managed to export a total of 100.192 billion rials worth of oil in September.

Earlier we reported that oil prices rose on expectations of demand in China.



Commodities

Exclusive-Russia struggles to collect oil payments as China, UAE, Turkey raise bank scrutiny

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MOSCOW (Reuters) – Russian oil firms face delays of up to several months to be paid for crude and fuel as banks in China, Turkey and the United Arab Emirates (UAE) become more wary of U.S. secondary sanctions, eight sources familiar with the matter said.

Payment delays reduce revenue to the Kremlin and make them erratic, allowing Washington to achieve its dual policy sanction goals – to disrupt money going to the Kremlin to punish it for the war in Ukraine while not interrupting global energy flows.

Several banks in China, the UAE and Turkey have boosted their sanctions compliance requirements in recent weeks, resulting in delays or even the rejection of money transfers to Moscow, according to the eight banking and trading sources.

Banks, cautious of the U.S. secondary sanctions, started to ask their clients to provide written guarantees that no person or entity from the U.S. SDN (Special Designated Nationals) list is involved in a deal or is a beneficiary of a payment.

The sources asked not to be named due to the sensitivity of the issue and because they are not allowed to speak to media.

In the UAE, banks First Abu Dhabi Bank (FAB) and Dubai Islamic Bank (DIB) have suspended several accounts linked to the trading of Russian goods, two sources said.

UAE’s Mashreq bank, Turkey’s Ziraat and Vakifbank and Chinese banks ICBC and Bank of China still process payments but take weeks or months to process them, four sources said.

Mashreq bank declined to comment. UAE’s FAB and DIB banks, Turkey’s Ziraat and Vakifbank, China’s ICBC and Bank of China did not reply to requests for comments.

Kremlin spokesperson Dmitry Peskov said payment problems exist when asked about reports that banks in China have slowed payments.

“Of course, unprecedented pressure from the United States and the European Union on the People’s Republic of China continues,” Peskov told a daily conference call with reporters.

“This, of course, creates certain problems, but cannot become an obstacle to the further development of our trade and economic relations (with China),” Peskov said.

U.S. EXECUTIVE ORDER

The West has imposed a multitude of sanctions on Russia after it invaded Ukraine in February 2022. Dealing with Russian oil is not illegal as long as it is sold below a Western-imposed price cap of $60 per barrel.

Russian oil exports and payments for it have been disrupted in the first months of the war but later normalised as Moscow re-routed flows to Asia and Africa away from Europe.

“Problems returned from December after banks and companies have realised the threat of U.S. secondary sanctions is real,” one trading source said.

The source was referring to a U.S. Treasury executive order published on Dec. 22, 2023, which warned it could apply sanctions for the evasion of the Russian price cap on foreign banks and called on them to boost compliance.

It became the first direct warning about a possibility of secondary sanctions on Russia, putting it on par with Iran in some areas of trade.

Following the U.S. order, Chinese, UAE and Turkish banks that work with Russia have increased checks, started asking for extra documentation and trained more staff to make sure deals were compliant with the price cap, the trading sources said.

Additional documents can also include details on the ownership of all companies involved in the deal and personal data of individuals controlling the entities, so that banks can check on any exposure to the SDN list.

In the end of February UAE banks had to rise payment scrutiny as they were asked to provide data to the U.S. correspondent banks and the U.S. treasury if they have transactions that go to China on behalf of a Russian entity, according to one banking source familiar with the matter.

“This meant delays in processing payments to Russia,” one of the sources said.

© Reuters. Bulk carriers lie at anchor in Nakhodka Bay near the port city of Nakhodka, Russia, December 4, 2022. REUTERS/Tatiana Meel/File Photo

One source said one payment had been delayed by two months, while another said the delays amounted to two to three weeks.

“It has become tough and not even for the dollar transactions. Sometimes it takes weeks for a direct yuan-rouble transaction to be executed,” one of the traders said.

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Commodities

Oil prices slide on signs of bumper build in US inventories

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Investing.com– Oil prices fell Wednesday after industry data showed a surprise, outsized build in U.S. crude stocks, challenging the notion of tighter markets in the near-term. 

At 08:55 ET (12:55 GMT), expiring in May fell 0.7% to $85.02 a barrel, while fell 0.8% to $81.00 a barrel. 

US oil inventories surge 9.3 mln barrels- API

Data from the showed that inventories saw a build of 9.3 million barrels in the week to March 22, compared to a drop of 1.5 million barrels in the prior week. The reading was substantially above expectations for a draw of 1.2 million barrels. 

API data usually heralds a similar trend in official , which is due later on Wednesday. But the API reading raised questions over just how tight U.S. crude markets were, especially as oil production remained at record highs of over 13 million barrels per day. 

“In addition, the API reported that Cushing crude oil stocks increased by 2.4 million barrels. If confirmed by the more widely followed Energy Information Administration report, this would be the biggest weekly gain since January 2023,” analysts at ING said, in a note.

Expectations of tighter global oil supplies- following Russian supply curbs, geopolitical disruptions in the Middle East and increased U.S. refinery activity- powered oil prices to four-month highs earlier in March. 

But this also set up crude for some profit-taking, especially in the wake of data potentially questioning the narrative of tight markets.

Dollar weighs ahead of PCE data, Fed speakers 

Strength in the , which hovered near one-month highs, also weighed on oil prices, especially as traders pivoted into the greenback ahead of more cues on U.S. inflation and interest rates later this week.

data- the Federal Reserve’s preferred inflation gauge, is due on Friday and is widely expected to factor into the central bank’s outlook on interest rate cuts. 

Along with the PCE data, addresses from major Fed officials- and – are also due on Friday. 

Ahead of them, Federal Reserve Board Governor Christopher Waller is due to speak later Wednesday, and his comments will be studied as they could potentially offer up more cues on interest rates. 

OPEC+ meets next week 

The Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, is set to meet next week to review the market and the extent to which members are implementing the agreed output cuts.

However, the group is unlikely to make any oil output policy changes until a full ministerial gathering in June, Reuters reported, citing sources.

OPEC+ agreed earlier this month to extend output cuts of about 2.2 million barrels per day to the end of June, although there has been uncertainity over whether all members have fully complied with their agreed production levels.

 

 

(Ambar Warrick contributed to this article.)

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Commodities

Oil falls for second day as US crude inventories surge

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By Paul Carsten

LONDON (Reuters) -Oil prices fell for a second day on Wednesday on surging U.S. stockpiles and signs the OPEC+ producer group is unlikely to change its output policy at a technical meeting next week. 

futures for May dropped 70 cents, or 0.8%, to $85.55 a barrel by 1258 GMT while the more actively traded June contract was down 61 cents, or 0.7%, at $85.02. The May contract expires on Thursday.

U.S. West Texas Intermediate (WTI) crude futures for May delivery fell 59 cents, or 0.7%, to $81.03. Both benchmarks had fallen by more than $1 in earlier trading.

Prices have retreated since climbing to their highest since October last week and remain about 3% above the average closing price in the first week of March.

A sharp rise in inventories and expectations for potential inaction by OPEC+ next week prompted further “unwinding” in oil prices as profit-taking accelerates after the mid-March rally, said IG market strategist Jun Rong Yeap.

U.S. crude oil inventories rose by 9.3 million barrels in the week ended March 22, said market sources citing American Petroleum Institute figures on Tuesday. Distillate inventories rose by 531,000 barrels, but gasoline stocks dropped by 4.4 million barrels.

Official government data will be published on Wednesday at 10:30 a.m. EDT (1430 GMT).

The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+, are unlikely to make any oil output policy changes until a full ministerial gathering in June, three OPEC+ sources told Reuters ahead of next week’s meeting to review the market and members’ implementation of output cuts.

OPEC+ this month agreed to extend output cuts of about 2.2 million barrels per day (bpd) to the end of June, though Russia and Iraq have had to go to extra lengths to tackle over-production.

Those struggles have called into question the group’s ability to comply with cuts, with OPEC having exceeded its targets by 190,000 bpd in February, a Reuters survey showed.

Traders are “watching OPEC members for any sign they may be altering their stance on production quotas,” ANZ analysts said in a report on Wednesday.

© Reuters. FILE PHOTO: An oil pumpjack is pictured in the Permian basin, Loco Hills regions, New Mexico, U.S., April 6, 2023. REUTERS/Liz Hampton/File Photo

Meanwhile, leading German economic institutes said they expect the country’s economy to grow by 0.1% in 2024, down from a previous forecast of 1.3%, in a grim sign for Europe’s economic powerhouse.

However, economic sentiment across the broader euro zone improved slightly in March, the European Commission said.

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