Over the next few years, Saudi Arabia will expand its oil refining capacity. This allows it to capture a larger portion of the value of its heavy crude and reduces dependence on the few importers with capacity to handle high-gravity crudes. But the refining expansion also erodes the kingdom’s “swing supplier” role in global energy markets. "Saudi Arabia will be less willing or able to vary its oil production to suit market needs, because it will find itself diverting a larger share of crude oil into the domestic market, leaving it with a smaller portion earmarked for export," writes Jim Krane, Wallace S. Wilson Fellow in Energy Studies.
Click on the PDF below to read "Saudi refining push exposes strategic shift away from crude exports" from the Middle East Economic Survey.