I know that after Venezuela (301 million barrels), Saudi Arabia with its 267 million barrels has the second largest reserves of crude oil in the world. (See chart below for full list) But, I never once bothered to find out who actually buys their oil. So, since I live in the Kingdom, I decided to set doing a bit of research to find out.
So which countries actually buy Saudi Arabian oil? The Observatory of Economic Complexity (OEC) says that 72% of Saudi crude oil and related products are sold to Asian countries and the remaining 30% to the US, some European countries, South Africa and Brazil.
Crude Oil Sales In Barrels By Destination And In Percentages
Note that the kingdom sold close 70% of its Crude Oil to Asia during the years 2017-2019. The USA and Western Europe received only about 12%, respectively.
The following is a more detailed list of the countries who buy Saudi Crude Oil and the amount starting with the biggest to the smallest purchases. (2017 statistics)
Remember: A billion is equal to a thousand million, or the number 1 followed by nine 0’s (1,000,000,000). MFS
|Number of Countries||Total Revenue|
However, crude oil sales are only one part of the total export of refined petroleum products. About 65% of its total export is crude oil. 35% of remaining exports are mainly in refined petroleum products, polymers, industrial alcohols, fertilisers/chemicals, gold and metals and foodstuff.
Top Exports of Saudi Arabia
Annually, Saudi Arabia exports about $170B. Crude oil sales account for a large part (65%) at $110 billion. The nation is the 26th largest exporter in the world. Export product sales, however, have decreased annually in the last 7 years at a rate of -21.1%.
The highest exports from Saudi Arabia are:
- Crude oil ($110B)
- Refined Petroleum ($14.1B)
- Ethylene Polymers ($11B)
- Acyclic Alcohols ($6.32B)
- Propylene Polymers ( ($4.59B)
Refined Products Sales In Barrels By Destination And In Percentages
Note that KSA sold close to 30% of its Refined Products to Asia and the Middle East, respectively. Sales to the USA were only 1.6%. Western Europe and Africa received about 20%, respectively.
Crude Oil And Refined Products Sales Combined In Percentages
The Total Percentage Sales Chart (above) shows that Saudi Arabia sold close to 50% of its combined crude and refined oils to Asia and The Far East during the three years of 2017-19. Both Western Europe, the Middle East, and Africa bought between 10% & 16.5%. US sales were a mere 7%.
Crude Oil and How to Derive Petroleum Products
Crude oil is a liquid form of hydrocarbons that were formed by the accumulation of animals and plants over a period of millions of years. The oil sits in large underground reservoirs, in lakes and in the small spaces between sedimentary rocks.
Petroleum products are made from crude oil. They also can come from coal, natural gas and biomass.
Once it is extracted from under the ground, the crude oil is sent to refineries. Here it goes through a process of separation (fractional distillation) to make a variety of petroleum products of saleable value.
Typically at the refinery, gasoline, diesel, heating, kerosene and jet fuels are produced. Also, petrochemical gas, foodstuffs, lubricating oils, asphalt and waxes are made.
The following 10 minute video succinctly explains the process of separating and refining crude oil.
Ethylene Polymers for Making Common Plastic Products
Saudi Arabia sells $11B dollars annually in Ethylene polymers worldwide. They are a type of polyethene that is used to make the most common forms of plastic. It begins with the distillation of hydrocarbon fuels that uses ethane to create lighter groups called fractions which are mixed with other catalysts to create plastics. The process is called polymerization or polycondensation.
From polyethelene, you can make supermarket bags, water bottles and plastic chairs and tables and many other things.
Acyclic Alcohols Mainly For Industrial Use
Alcohol is produced by a process of fermentation of fruit, grain or yeast. Ethanol results and is used as fuel and in alcoholic drinks. Synthetic processes, however, exist from the distillation of hydrocarbon gas and petroleum.
Saudi Arabia is the top exporter of Acyclic Alcohol $6.23B. From it, methyl, methanol, propanols, butyl, butanols, octyl, octanols, ethylene, glycol, ethyl, denatured spirits, fatty, glycerol lyes, are derived. MFS
It is used in the automotive industry (ethanol and methanol) as fuel or antifreeze, as solvents in industry, for making drugs, perfumes, and essences such as vanilla.
It is also used in hospitals and clinics and in restaurants or places where hygiene is utmost.
Propylene Polymers To Make Specialized Plastics
Saudi Arabia exports 2.7% or $4.59 billion worth of propylene polymers. Polypropylene is a step up from the cheaper, high commodity polyethylene products. Denser and more expensive to produce it is used in low volume applications.
With polypropylene, you can make tougher products such as bottles, hinges, packaging, bags, ropes, rugs, roofs, textiles and so much more.
Saudi Aramco-Oil Producing Giant
Saudi Aramco has some of the biggest oil producing fields in the world. It is the world’s most profitable company with an annual income of $111 billion.
Saudi Aramco produces 12.5 billion barrels of oil per day. The Shayba project located in the Rub Al Khali desert is its biggest field and with a potential yield of 15 billion barrels. Another is the Ghawar field which produces 5 million barrels daily.
When did Oil Production Start?
Oil in Saudi Arabia was first discovered in 1908, but proper exploitation did not begin until 1938. Oil production turned the economy around from subsistence and dependence on income from Hajj and Umrah to becoming the massive gas and oil giant that it is today.
How Much Oil Does it Produce Each Day and Why?
OPEC increased or scaled back production of crude oil to help control oil prices on the international market. Saudi Arabia, however, insists on maintaining high production and it currently produces more than 1 MBOD.
This is strategic in order to keep drilling activity lower in the USA and elsewhere. It also means that these 1 million extra barrels a day cannot be consumed and need to be stored in tanks, ships and under the ground.
Where are the Biggest Oil Fields in Saudi Arabia?
Most of the major oil fields are in the Eastern part of Saudi Arabia near the cities of Jubail, Dharan, Dammam and Rub Al Khali.
How is the Crude Oil Moved Out of Saudi Arabia?
Crude oil and its refined products are shipped out principally through three major ports.
- Ras Al Jumayah Oil Terminal (East)
- Ras Tanura Port (East)
- Yanbu Port, Red Sea (West)
Exports intended for the Eastern markets are shipped from Ras Al Jumayah and Ras Tanura. Shipments for Western markets are conducted through Yanbu on the Red Sea.
Pipelines from Abqaiq to Yanbu, Red Sea
There is a huge pipeline that runs East to West connecting Abqaiq to Yanbu. It carries 4.08 MBOD and is 1,200 km long. The main oil fields in the Eastern region connect to Abqaiq with pipelines of their own.
Until the 1990s, the Trans-Arabian Pipeline carried 0.5 million barrels daily of oil to a Mediterranean port intended for the Sham countries of Jordan, Lebanon and Syria. Because of political tensions, the use of the pipeline halted in the 90s.
How Long Will Saudi Oil Reserves Last?
External audits conclude that the Saudi Kingdom’s reserves are 260 + billion barrels. This figure is greater than previously estimated and puts to rest the myth that Saudi oil reserves are fast coming to an end.
Saudi Aramco natural gas reserves are given to be 319.5 trillion cubic feet which are also greater than the 302.3 previously estimated by the company itself.
There are also oil reserves which are as yet untouched near Kuwait in the so-called Neutral Zone that total 268.5 billion barrels.
Audits were conducted by DeGoyer and MacNaughton company in preparation for the public offering of shares in the Saudi Aramco company. The goal is to produce a $2 trillion valuation for purposes of the offering and to generate $100 billion to fund Crown Prince Mohammed’s Vision 2030, the economic transformation plan.
Plans to float Saudi Aramco stock, however, were scuppered over indecisions on major aspects of the offering and delayed during the period that Aramco is trying to buy SABIC, the Saudi petrochemicals giant. It is clear that oil reserves will last for many more years to come. MFS
Which countries have the largest proven reserves of Crude Oil?
Venezuela tops the list with huge reserves of ‘extra-heavy‘ crude oil only economically viable when oil prices are high. When world oil prices are low, these reserves fall off the ‘proven‘ category and plunge far below those of Saudi Arabia.
For more information, click to read Robert Rapier’s How Much Oil Does Saudi Arabia Really Have?
|No||Country||Reserves MB (2017)|
|7||United Arab Emirates||97,800|
Why does USA Import Oil from Saudi Arabia when it has its own oil? In reality, it does not matter where the oil is from. The markets are so interrelated that even small changes can trigger effects elsewhere. In fact, the US imports oil from five countries mainly Canada, Saudi Arabia, Mexico, Venezuela and Nigeria. MFS