During last week, US didn't import any crude from Saudi Arabia for the first time ever in 35 years, as reported by Bloomberg. In a move firmly exemplifying the eliminating dependence of The States on Middle East oil, this comes especially after a threat from the Kingdom months ago to upend the American energy industry.
This seemingly sudden drop has only become apparent now since tankers from Saudi Arabia take about six weeks to reach import terminals on either the west or Gulf coasts and this is the first week America had no deliveries based on available weekly data through June 2010 from the U.S. Energy Information Administration. Looking at the longer monthly reports, the last time when there were no Saudi imports happened in September, 1985.
After a plunge in prices earlier this year because of a brief production free-for-all, the oil producing countries of the Organization of Petroleum Exporting Countries and ten non-OPEC allies agreed to cut production by a record 9.7 million barrels a day. However, in the past month, oil prices have seen a rise based on hopes that demand could improve as a number of vaccines have been announced to fight the pandemic.
But America is still struggling with a rising number of record infections, prompting restrictions in several states, also leading to highly low gasoline consumption even in the Thanksgiving holiday period. Hence, consistently low demand has even rendered several refineries idle. For Saudi Arabia, cutting shipments to the U.S. is the quickest way to show the wider market that it’s tightening supply.
