How Saudi Arabia Is Freeing a Million Barrels a Day for Export

Core Insights - Saudi Arabia is experiencing a structural decline in domestic oil consumption for power generation, indicating progress towards its Vision 2030 goal of eliminating oil from its electricity mix [1][2] - The decline in oil-based power generation fuels, including crude oil, fuel oil, and gasoil, averaged 270,000 barrels per day in June and July 2025, despite a 1.6% increase in cooling degree days and demographic growth [2] - The Liquid Fuels Displacement Program aims to reduce domestic oil use by approximately 1 million barrels per day by 2030, with the Jafurah unconventional gas field expected to significantly boost gas output [2][3] Oil Consumption Trends - In the first seven months of the year, total oil burn decreased by nearly 100,000 barrels per day year-on-year, highlighting improvements in gas availability and renewable energy deployment [2] - Currently, 62% of Saudi power generation is from natural gas, while oil accounts for 38%, with renewables contributing less than 1% [3] Future Projections - The Vision 2030 strategy aims for a 50:50 split between gas and renewables by the end of the decade, potentially freeing over 1 million barrels per day of crude and fuel oil for export [3] - The transition to gas-fired plants is gradual, with many facilities still under construction and expected to be operational by 2027-2028 [4] - The conversion of the 3.5 GW PP10 power plant near Riyadh could reduce oil use by 40,000-60,000 barrels per day, with additional conversions planned through 2030 [4]