Saudi Arabia and the United Arab Emirates cut back on expensive gasoline imports. In recent years, both countries worked on their refining capabilities in order to become leading exporters of the fuel.
Set to lose an estimated 60,000 barrels per day, Saudi Arabia and the UAE's imports declined in the past with the creation of their own individual refineries. The strong global demand for gasoline will help balance the loss of shipments to these two countries.
"Most of the counterbalancing will be done by lower exports from surplus countries, either because domestic consumption is growing (such as in India) or because the refining sector or yields are shrinking (such as in OECD markets),"David Wech, managing director of consultancy for JBC Energy, said.
Due to the rise in the local use of gasoline, India will likely decrease its overseas sales. Japan and Australia, members of the Organization for Economic Co-operation and Development, are reducing their refining as a result of less domestic use, as well as more affordable imports.
High exports are the future
Although the two Middle Eastern oil powerhouses are cutting back, their mission to become higher exporters does not end. Both countries are continuing to build new refineries: one at Fujairah for the UAE and another at 400,000 barrel per day refinery at Jazan for Saudi Arabia before 2018.
Consulting firm, FGE expects Saudi Arabia to import some fuel this year, but predicts that the net import will fall from 80,000 bpd in 2014 to 25,000. This decrease in gas imports is a transition for both of these countries, but it is just a miniscule amount compared to the 24 million barrels per day the world will consume in 2015.
Ngai Si Min, consultant at FGE, believes Saudi Arabia's imports could be down to 12,000 bpd by 2016.
This news comes on the heels of the release of BP's Statistical Review of World Energy on June 11, which found the United States to have surpassed Saudi Arabia as the largest oil producer. The U.S. produced 11.6 million bpd to Saudi Arabia's 11.5. That's almost 16 percent more than what the U.S. produced in the past years.
The focus is now on becoming an exporter country, instead of an importer one. Both Saudi Arabia and UAE are taking serious strides to attain that goal.