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Saudi Arabia recorded a GDP growth rate of 11.8 percent for the second quarter, driven by a 23.1-percent rise in oil income, according to preliminary data cited by Reuters.
The value of Saudi Arabia’s oil exports has been growing this year, especially after the Russian invasion of Ukraine in February. The latest monthly data, for May, revealed a 106-percent increase on the year to SR116.2 billion, with oil exports making up 80.6 percent of all exports out of Saudi Arabia in that month.
Saudi Arabia, OPEC’s biggest oil producer, was recently put in the spotlight as one of the few OPEC members that may have the spare oil production capacity to make up for lost Russian supply.
The Kingdom, however, has been reluctant to tap this spare capacity, with Crown Prince Mohammed bin Salman, the de facto ruler of the country, saying last month that “The Kingdom will do its part in this regard [boosting global supply], as it announced an increase in its production capacity to 13 million barrels per day, after which the Kingdom will not have any additional capacity to increase production.”
Until that happens, however, Saudi Arabia is pumping, and it is asking top dollar for its crude. The Kingdom lifted its official selling prices several times this year and might hike them again to record highs, Bloomberg reported recently.
A poll among five refiners suggested that the Saudis could hike the price for Arab Light, the flagship blend, to as much as $10.80 per barrel above the Dubai/Oman benchmark for September loadings to Asia.
Meanwhile, traders expect that demand for oil from Asia might begin to soften next month after refiners have kept their facilities running at maximum rates over the past few months.
Oil remains Saudi Arabia’s top export commodity despite efforts being made to diversify the country’s revenue streams from abroad.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com