Saudi Arabia is loading up on imported fuel oil ahead of a summer in which the Middle East conflict and uncertainty around the Strait of Hormuz is expected to strain its domestic energy balance. The closure of the strait will likely have a significant impact on gas production (MEES, 6 March), limiting the availability of the kingdom’s primary source of feedstock for power plants and forcing it to resort to burning more oil to meet power demand.
Oil is a key fuel for Saudi Arabia’s power sector, but its share has been diminishing in recent years as it has been squeezed out by gas and renewables through the Liquid Fuel Displacement Program (LFDP). Even with grid-supplied electricity demand increasing by 8% to a record 349TWh last year, oil burn fell by more than 100,000 b/d thanks to the availability of alternatives (MEES, 1 May). (CONTINUED – 697 WORDS)
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