Saudi Arabia will burn more oil to generate electricity this summer, as gas production falls

Analysts say that Saudi Arabia will burn more fuel oil imported for power generation in the summer due to a lack of natural gas from oilfields which have been closed?after Iran war curtailed its?oil?exports.

Fuel oil consumption at power plants is on the rise just as summer cooling demands are increasing. This is a setback to the Kingdom's efforts to switch to cleaner fuels.

After an Iranian blockade of the Strait of Hormuz, the world's largest oil exporter was forced to close more than 3,000,000 barrels of oil per day of production. This has led to a reduction in gas production as resulting from oil production.

Saudi Aramco's latest quarterly earnings report revealed that gas production fell to 10.5 billion cubic ft per day (bcfd), from 10.7 in the fourth quarter 2025. This was despite the launch of the Jafurah field in December.

Aramco increased fuel oil imports by 86% in April to 1.7 million tonnes (360,000 bpd), Vortexa data showed. Most of these imports were discharged at terminals connected to power and desalination plant including Jeddah South, and Shuqaiq steam.

Rahul Choudhary is vice president of oil and gas research for Rystad Energy. He said that the sharp rise in fuel oil imports was a sign that oil consumption would be higher than it had been a year ago.

Power demand in the kingdom typically increases?from April to August and is boosted by crude oil, high-sulfur fuel oil (HSFO), and gas at power plants.

Choudhary stated that the burning of crude oil and fuel oil to generate electricity could surpass 1 million barrels a day this summer. This would counter efforts to switch more to gas and renewables, and reverse the 991,000 bpd decline seen in 2025.

Saudi Aramco refused to comment. The Saudi government's communications office has not responded to a comment request.

ARAMCO Prioritises Crude for Exports

Analysts said that Saudi Aramco will burn less oil for electricity this summer, as they prioritize Arab Light crude for export via the East-West Pipeline to the Red Sea Port of Yanbu, and because HSFO is cheaper.

Saudi Arabia burned 593,500 barrels of crude oil per day between June and Septembre last year. This is according to data collected by the Joint Organisations Data Initiative.

Analysts differ on the amount of crude oil Saudi Arabia will use to generate electricity this summer.

Wood?Mackenzie anticipates a drop of 5,000 to 15,000 bpd from an average crude burn rate of 629,000bpd between June and August 2025.

Jayadev D., an oil research analyst with WoodMac, said that "every barrel of Arab Light crude consumed domestically represents a substantial loss in windfall?revenue".

Rystad Energy estimates that crude oil consumption will average between 540,000 and?550,000 barrels per day (bpd) this summer.

Choudhary explained that, "However if the disruption in Hormuz deepens and extends into Q3, Aramco could pivot to direct crude burning as a contingency", he said.

Koen Wessels is the head of Energy Aspects'?demand department. He expects Saudi Arabia will burn?more oil this summer than it did in 2025, as its?supply of crude can only be diverted to Red Sea ports.

Wessels, of Energy Aspects, said that the transits through Hormuz will remain disrupted until the end May. In June, tonnages are expected to recover to 50%, 60%, and 70% from pre-war levels.

(source: Reuters)