Saudi Arabia Faces Summer Power Crunch
Saudi Arabia to increase its reliance on imported fuel oil for power generation this summer, following a loss of natural gas supplies from oilfields shut down after the Iran war curtailed its oil exports, analysts expect, according to Reuters.
The increase in fuel oil consumption at power plants, coinciding with surging summer electricity demand for cooling, represents a setback to the kingdom’s efforts to transition toward cleaner energy sources.
Analysts report that the world’s largest oil exporter has been compelled to shut more than 3 million barrels per day (bbl/d) of production after an Iranian blockade of the Strait of Hormuz halted crude shipments from Ras Tanura, cutting off associated gas output tied to oil production.
Gas production slipped to 10.5 billion cubic feet per day (bcf/d) in the first quarter, down from 10.7 bcf/d in the fourth quarter (Q4) of 2025, despite the December start-up of the Jafurah gas field, Saudi Aramco said in its latest earnings report.
To offset reduced gas supplies at power plants, Aramco boosted fuel oil imports to about 1.7 million tons (360,000 bbl/d) in April, an 86% increase from a year earlier, according to Vortexa data. Most of these shipments were discharged at terminals serving power and desalination facilities, including Jeddah South and Shuqaiq Steam.
“The sharp increase in fuel oil imports is a leading indicator that oil burn will rise above year-ago levels,” Rahul Choudhary, vice president, oil and gas research at consultancy Rystad Energy, said.
The kingdom’s electricity demand typically climbs from April and peaks in August, driving increased consumption of crude, high‑sulphur fuel oil (HSFO), and natural gas at power plants.
Burning crude and fuel oil for power could exceed 1 million b/d this summer, reversing the 2025 low of 991,000 b/d and undermining efforts to shift toward greater use of gas and renewables, Choudhary said.
Saudi Aramco declined to comment, while the Saudi government’s communications office did not respond to requests for comment.
Saudi Aramco is expected to reduce crude burning for power generation this summer, as analysts note the company is prioritizing exports, mainly Arab Light, through the East‑West pipeline to the Red Sea port of Yanbu, while high‑sulphur fuel oil (HSFO) remains a cheaper alternative to Saudi crude.
Saudi Arabia’s direct crude burn averaged 593,500 bbl/d between June and September last year, according to data from the Joint Organizations Data Initiative (JODI).
Analysts hold differing views on the volume of crude Saudi Arabia will burn for power generation this summer.
Wood Mackenzie projects a decline of 5,000 to 15,000 bbl/d in Saudi Arabia’s crude burn this summer, compared with the average of 629,000 bpd recorded between June and August 2025.
“Every barrel of Arab Light crude burned domestically represents a significant loss in windfall export revenue,” said Jayadev D, oil research analyst at WoodMac.
Rystad Energy forecasts Saudi Arabia’s crude consumption for power generation to average around 540,000 to 550,000 b/d this summer.
“However, if the Hormuz disruption deepens or extends well into Q3, Aramco may pivot from substitution to direct crude burn as a contingency,” Choudhary said.
Koen Wessels, head of demand at Energy Aspects, expects Saudi Arabia to burn more crude for power generation this summer than in 2025, citing limits on how much supply can be diverted to Red Sea ports.
Energy Aspects expects transits through the Strait of Hormuz to remain disrupted until the end of May, with crude flows recovering to about 50% of pre‑war levels in June, 60% in July, and 70% in August, Wessels said.
Reporting by Jeslyn Lerh in Singapore, with additional reporting from Yousef Saba in Dubai; editing by Florence Tan and Sonali Paul.
The post Saudi Arabia Faces Summer Power Crunch first appeared on Egypt Oil & Gas.
المصدر: Egypt Oil & Gas