A look at the oil market and Saudi oil exports as the Russian invasion in Ukraine rages. Where is Saudi Arabia’s oil going now, and what’s next for energy markets?
With oil now headed over $100 a barrel on Brent and possibly even higher as the situation in Ukraine deteriorates, Washington is already in close coordination with Saudi Arabia on energy markets. Russia of course is a big player in the oil markets – making up the “plus” in the new market-setting cartel “OPEC+,” which adds a layer of complexity to the crisis in Ukraine and as as sanctions against Russia start to ratchet up, although the West is not sanctioning the Russian oil sector yet.
However, much of Saudi Arabia’s oil now heads to Asia – in fact in 2021, 80% of Saudi crude headed to Asia, with China as the leading consumer. The top four destinations for Saudi crude are China, Japan, South Korea and India. Recent data show that US was again the only non-Asian importer of Saudi oil to make the top five, but the amount the U.S. imported from Saudi Arabia decreased from 407,000 b/d in 2020 to 376,000 b/d in 2021. This is the lowest in 36 years. Saudi exports to European markets also dropped in 2021.