Oil demand in the 10 top-consuming Middle Eastern countries (ex-bunkering) declined for the second straight month in April, falling y/y by 0.21 mb/d to 5.66 mb/d. Saudi Arabian demand dropped by 31 thousand b/d y/y, with fuel oil (+0.15 mb/d y/y) the only product to increase, supported by substitution away from crude for burning (-0.11 mb/d y/y) and higher-than-anticipated power demand. A heatwave sweeping across the region in June is likely to support cooling demand after a cooler-than-normal spring. Diesel demand continued its downward trend, falling by -29 thousand b/d y/y, with cement sales dropping by 4% in April. Gasoline (-11 thousand b/d) also declined y/y. Iraqi demand fell by 0.10 mb/d y/y in April, the first y/y fall since June 2018. The declines were led by crude for burning (-0.10 mb/d y/y) and fuel oil (-25 thousand b/d) due to massive flooding in late March to early April and substitution by natural gas in power generation. Diesel (+28 thousand b/d) and gasoline (+9 thousand b/d) both gained slightly y/y. Going forward, rising tensions in the region could impact Middle Eastern oil demand growth, with two tankers attacked off the coast of Oman on 13 June—the second incident affecting shipping in the past month.
Middle Eastern refinery runs rose by 0.15 mb/d m/m to 7.75 mb/d in April, but were higher y/y by 0.40 mb/d. Saudi Arabia led the growth, rising by 0.40 mb/d y/y. Across Q2 19, we forecast runs at 7.90 mb/d, higher y/y by 0.30 mb/d, with planned CDU works currently expected to be 50 thousand b/d lower y/y at 0.19 mb/d.