Skip to content Skip to Search
Skip navigation

Oil cuts drag down Saudi industrial activity

By Andrew Hammond
Saudi oil cuts industrial activity production Reuters/Maxim Shemetov
Saudi Arabia has extended a one million barrels per day voluntary crude oil output cut into September
  • Production fell 1.6% in June
  • 1m barrels per day cut to September
  • Kingdom’s exports down $11bn

Saudi Arabia’s industrial production fell 1.6 percent in June, as oil production cuts lowered reported mining and quarrying productivity.

The decline was reported in new data from the General Authority for Statistics (GSTAT) published on August 10. 

Manufacturing activity increased by 10.1 percent compared to the same month of the previous year. Electricity and gas supplies rose by 25 percent. The index was up overall from May by 0.5 percent. 

GSTAT counts oil production as part of mining and quarrying activity, so the recent policy of cuts resulted in this falling by 6.5 percent.

The kingdom is trying to drive up manufacturing as part of its economic diversification plans. The Ministry of Industry and Mineral Resources said in April that 495 billion Saudi riyals ($132 billion) had been invested in the sector since 2016 when Vision 2030 was launched.

Saudi Arabia announced this month it will extend a one million barrels per day voluntary crude oil output cut into September. It blamed concerns about a global economic slowdown and a slump in demand. 

Riyadh’s decision to scale back oil production cut the kingdom’s total exports in the last year by $11 billion, GSTAT said last month.

Overall merchandise exports from Saudi Arabia amounted to SAR 97.1 billion ($25.89 billion) in May 2023, down 32.1 percent year on year.

Most of this was a result of oil exports amounting to SAR 72 billion, down SAR 43.5 billion, or 37.7 percent, compared with May last year.

Oil made up 74.1 percent of total Saudi exports in May 2023, down from 80.8 percent in May 2022. 

Non-oil exports – including re-exports, which rose 50 percent – decreased by 8.7 percent to SAR 25.1 billion in the last year, the figures showed.

Latest articles

Property app Stake says it is close to acquiring a fully-rented mall and a 140-apartment tower in Riyadh

Property app Stake to launch in Saudi Arabia

A fractional-ownership platform that enables investors to own parcels of real estate for as little as SAR500 ($134) is to launch in Saudi Arabia on December 9.  Based in Dubai, Stake offers investors the opportunity to buy parts of residential and commercial properties.  Fractional property ownership is a rising trend in the global real estate market. […]

Saudi date drink cola Milaf

‘World first’ date soft drink launched by PIF subsidiary

A soft drink made from dates has been launched by Al Madinah Heritage Company, a subsidiary of Saudi Arabia’s Public Investment Fund. Milaf Cola, which is claimed to be the world’s first commercial soft drink made from dates, uses only premium fruit and contains no added sugar.  Dates have historically been used in Middle Eastern beverages […]

Uber and WeRide launch autonomous mobility service in Abu Dhabi

Uber launches driverless operations in Abu Dhabi

Ride-hailing giant Uber Technologies and Chinese autonomous vehicle tech company WeRide have launched a commercial driverless taxi service in Abu Dhabi. The service, available on the Uber platform, will be available for trips on Saadiyat Island, Yas Island and routes to and from Zayed International Airport, with plans to expand the operating territory in the […]

Houses in Royal Crescent, Holland Park. The area is one of London's most expensive neighbourhoods

Abu Dhabi royal family buys £61.5m London mansion

Abu Dhabi’s Al Nahyan royal family has purchased a mansion in Holland Park, one of London’s exclusive neighbourhoods.  The family paid £61.5 million ($78.1 million) for the property, which includes a swimming pool and cinema room, Bloomberg reported, citing people familiar with the matter. The deal was completed in October before the UK government introduced […]