Saudi Arabia’s oil exports to the United States fell nearly 50% year-on-year in August 2020, reaching a 35-year low in oil imported from the Kingdom, according to CNN which cited info from ClipperData.
If verified by official U.S. data, the U.S. imported 264,000 barrels per day in August, the lowest since the Reagan era in 1985, CNN reports.
The significant decline in Saudi oil exports comes as the Kingdom’s leaders tighten the taps in concert with OPEC+ countries to boost the price of oil from lows in March.
“Saudi crude flows bound for the US have basically dried up,” Matt Smith, director of commodity research at ClipperData, told CNN Business.
The strategy, though expensive in the short term for Saudi Arabia as it forgoes potential revenues in favor of a higher global price for the commodity, is working. Oil has steadily climbed higher on international indices over the last 5 months and a supply glut which built up over the start of the global pandemic has eased.
Investment bank and financial services company Goldman Sachs said that it expects Brent crude to reach $65 a barrel in the third quarter of 2021, according to Business Insider.
“There is a growing likelihood that vaccines will become widely available starting next spring, helping support global growth and oil demand, especially jet,” Goldman analysts said.
As Nasdaq via OilPrice.com notes, earlier this year, Goldman’s head of commodities Jeffrey Currie said that the short-term prospects of oil remained weak, but in 2021, prices would start to improve more markedly.
