Saudi Arabia has built up its commercial oil reserves to 326.6 million barrels as of August this year. This is the largest amount for the previous 13 years. At the same time, oil exports from the Saudi Kingdom are down: in July they stood at 7.28 million barrels per day and in August they were a meagre 7 million barrels per day.
The data demonstrates how Riyadh’s strategy of holding back the oil filled flood gates from the market is not really having the desired effect. This build-up of commercial reserves has led to the oversupply of oil on the market, in turn leading to a fall in prices. As a result, exports of oil have fallen. Extraction has gradually begun to fall. In July, Saudi Arabia drilled 10.36 million barrels per day, 10.27 million in August and 10.23 million barrels in September. We reckon that low demand for oil, coupled with low prices will lead to further decreases in Saudi drilling and exports.