The US has bought an average of less than 1m barrels a day of Saudi crude over the past year, weekly and monthly US government data show.
The kingdom has been compensating for the loss of sales by accelerating its pivot towards Asia, with China vying with the US as one of the biggest buyers of Saudi crude. But any weakening of the economic ties that bolster Saudi Arabia’s relations with the US may still provoke concern in Riyadh, as it undergoes a major power shift.
“The behaviour of the kingdom over the past year suggests they recognised the US was going to be a declining market and east of Suez was their growth market,” said Jason Bordoff, founding director of Columbia University’s Center on Global Energy Policy.
“But this argument has limitations. They want to be diversified and need a presence in the US for geopolitical reasons.”
As recently as 2013, the US
While a sharp increase in US oil output has already taken the place of much of the crude that the country used to
Canadian exports to the US are now averaging more than 3m b/d, an increase of roughly 1m b/d since 2011.
Saudi Arabia is now aggressively marketing its crude to Asia, having lost market share to Iran and Iraq. Veteran oil minister Ali al-Naimi said in April during a trip to Beijing that Saudi Arabia was now sending China more than 1m b/d, having recovered from a dip last year, according to customs data.
The kingdom has also launched a number of refining joint ventures in Asia, including South Korea, similar to deals it already has with Shell through Motiva in the US, which operates the country’s biggest refinery.
Additional reporting by Gregory Meyer in New York