U.S. imports of crude oil from Saudi Arabia and Iraq are at the highest level since 2012, according to U.S. Energy Information Administration. After hitting low points in 2014 and 2015, the United States has been importing more crude oil from Saudi Arabia, but imports might soon fall again as a result of the November 2016 decision by the Organization of the Petroleum Exporting Countries (OPEC) to cut production and the price differences between foreign and U.S. oil.
On Nov. 30, 2016, OPEC announced it would cut oil production by 1.2 million barrels per day, starting Jan. 1, 2017. After the announcement, the price of Dubai/Oman crude oil rose because “the supply reductions pledged by Middle East producers disproportionately affected medium, sour crudes,” according to the EIA. These market developments “suggest that U.S. imports from Saudi Arabia and Iraq are now becoming less attractive to U.S. refiners.”
But in late 2016, “high production in Saudi Arabia and Iraq, as well as seasonally low internal demand in Saudi Arabia, contributed to record crude oil exports from Iraq and near-record exports from Saudi Arabia,” according to the Joint Organizations Data Initiative (JODI). Saudi Arabia exports rose to 8.3 million barrels per day in November 2016, which was the highest level since May 2003. In December, exports declined to 8 million barrels per day.
In Iraq, exports increased to nearly 4.1 million barrels per day in November 2016. They remained at that level in December. “Saudi and Iraqi production levels were relatively high prior to the pledged January 2017 production cuts, with December 2016 volumes up 321,000 barrels per day and 700,000 barrels per day, respectively, from their year-ago levels, creating an opportunity to increase exports,” according to JODI.