Saudi Arabia has been cranking up oil refining operations to capture strong profit margins, helping the kingdom offset revenue lost from declining crude prices and exports.

The world’s top oil exporter has in recent years invested heavily in expanding and modernizing its refining and petrochemical capacity at home and overseas to meet growing demand for fuel and plastics while also securing outlets for its crude oil.

Saudi Arabia has nine local refineries with a combined capacity of 3.33 million barrels of oil per day (bpd), accounting for roughly 3% of global demand, which are configured to process its domestically produced crude oil. It operates another 4.3 million bpd of refining capacity abroad, including in China, the United States and Malaysia.

The kingdom’s domestic refineries processed 2.94 million bpd in March, the highest-ever volume for that month and only a smidgen below the record high of 2.96 million bpd in April 2024, according to data from the Joint Organizations Data Initiative (JODI).

The 12% monthly increase in refining crude intake in March was 23% above the 10-year average for the same period. It correlates with a 12% month-on-month drop in Saudi crude exports to 5.75 million bpd in March, according to the data, highlighting the kingdom’s flexibility between directly selling crude to other refiners and refining it itself.

Saudi refinery rates likely declined by around 200,000 bpd in April due to planned plant maintenance, but should remain at elevated levels ahead of peak summer demand season, according to Keshav Lohiya, CEO and founder of analytics firm Oilytics.

Saudi’s refined product exports, which include diesel, gasoline, jet fuel and fuel oil, rose to a record 1.58 million bpd in March, before declining to 1.48 million bpd in April and 1.42 million bpd so far in May, according to data from ship tracking firm Kpler, likely reflecting refinery turnaround.

FLEXIBILITY

This integrated strategy offers Saudi Aramco (2222.SE), opens new tab, the country’s national oil company, an effective way to manage oil price volatility as refining margins – the profit made by processing crude oil into transportation fuels and chemicals – typically rise when feedstock prices decline.

By Ron Bousso / May 27, 2025