Saudi's US Market Share is Growing Fast

psw08 2016-3-16

Saudi Arabia's US crude oil market share is growing fast.  The above chart clearly shows a surge in US imports from Saudi Arabia starting in November 2015.  Calculations indicate imports from SA began to increase on a year over year (YoY) basis early in the summer of 2015.  However, the pace was slow and EIA weekly data was pointing to rising US production this likely was one of the reasons the Saudis were so against any price support in the December 2015 OPEC meeting.

But now US imports for the start of 2016 are up 27% versus the same period in 2015.  At the same time it is quite apparent US production is in fast decline, and is locked into decline for months or even years to come with under 390 oil rigs working and that number falling weekly.

An increasing crude oil market share for the Saudis in the US is the linchpin that will keep the Saudis behind a drive to support prices.  With WTI under $60 this trend should not reverse anytime soon.  The Saudis don't need to be in a hurry to grow their US market share in terms of barrels they just need to know it's growing and US producers are staying the same or contracting.  However, it is in the Saudis best interest to grow their overall market share in terms of dollars quickly.  Especially if they want to maximize the return on their Aramco IPO.