Saudi Arabia told OPEC that it pumped a record 10.67 million barrels of oil a day in July to meet a summer surge in domestic demand, an increase that will do nothing to endear the group’s leading exporter to other members seeking output limits to shore up prices.
The figures were submitted to the Organization of Petroleum Exporting Countries, according to two people with knowledge of the data, who asked not to be identified because the information hadn’t yet been made public. The output beat the previous all-time production high of 10.56 million barrels a day in June 2015, according to OPEC submissions. The group confirmed the figure later Wednesday in its monthly report.
OPEC will hold informal talks at a conference in Algiers next month, as members constantly discuss ways to stabilize the market, Mohammed Al Sada, Qatar’s energy minister and holder of OPEC’s rotating presidency, said Aug. 8. Russia, Saudi Arabia and other major oil exporters met in Doha in April in a bid to stabilize markets by putting caps on output. The effort collapsed after Saudi Arabia demanded that rival Iran be a part of the deal. At the time, Iran had ruled out any limits on its output as it ramped up after the lifting of international sanctions.
“It’s not surprising to see Saudi output at record,” said Anas al-Hajji, an independent analyst and former chief economist at NGP Energy Capital Management LLC in Houston. “The Saudis didn’t want to cut back on exports and they needed to produce more to meet local summer demand. Also, the Saudis are processing more crude this year at refineries as they want to grow in the products market.”
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Power demand in the Middle East peaks in the hottest months of July and August, when Saudis turn up their air-conditioners to cool homes and offices. Saudi Arabia was planning to boost crude production to 10.5 million barrels a day for the 2016 summer, a person with knowledge of Saudi output policy said in April.