Saudi Arabia Reduces Crude Burn as OPEC+ Increases Output Amid Global Oil Glut Concerns

Saudi Arabia is cutting domestic crude consumption while OPEC+ ramps up production, creating a potential oversupply in global oil markets. The kingdom's August crude burn for electricity hit 900,000 barrels per day—the highest since 2009—but is projected to drop significantly as temperatures cool. This shift will release hundreds of thousands of barrels back into global circulation.

Simultaneously, Saudi Arabia is leading OPEC+'s effort to restore previously capped output. The producer group anticipates strong demand to stabilize prices, but analysts warn this may not materialize. "We expect global oil demand to have peaked in August," said UBS analyst Giovanni Staunovo, citing declining Middle Eastern temperatures and the end of northern hemisphere travel season.

The market faces additional pressure from Saudi Arabia's new natural gas project, which will further reduce domestic oil use and increase export capacity. This comes as traders already fear a growing glut through 2026.