In Saudi Arabia, oil demand figures declined for the second consecutive month in May 2016. Oil requirements decreased by around 0.18 mb/d, or more than 6%, compared with the same month in 2015. All products declined at different rates, with the exception of LPG and gasoline, both of which recorded solid gains. The largest decline originated in industrial and power generation fuels, with fuel oil declining by 66 tb/d, or around 13% y-o-y. Additionally, crude oil utilized for direct burning for power generation also declined, shedding around 17 tb/d y-o-y.
The decrease in usage of these products was a result of lower weather temperatures compared to May 2015, which resulted in less air conditioning use. Moreover, diesel oil and jet/kerosene also declined by around 11% and 2% y-o-y, respectively. Fewer air travel activities before the start of the summer holiday, in combination with less consumption in the transportation and industrial sectors, caused the demand decline in middle distillates. Looking ahead, oil demand is anticipated to improve during June and 3Q16 as the transportation and industrial sectors continue to perform well due to peaking summer demand and to meet the requirements after Ramadan and the Eid-al-Fitr holiday.
In Kuwait, strong fuel oil and LPG demand have implied an overall oil increase in oil requirement in April 2016. Oil demand also grew in Qatar and the UAE, where an increase in transportation fuels – notably gasoline – dominated. Iraqi oil consumption increased for the second month running, led by jet/kerosene and fuel oil which respectively increased by more than 20% and 17% y-o-y. The overall demand increased by around 13 tb/d or more than 2% y-o-y.
In 2016, Middle East oil demand is anticipated to expand by 0.14 mb/d compared to 0.26 mb/d in 2015.