Saudi Arabia experienced a significant setback in its export sector as total exports, encompassing both oil and non-oil products, dropped by 25% year-on-year in March 2023. Official data released by the General Authority for Statistics revealed that exports fell to 106 billion royals ($28 billion) from SAR 142 billion in the corresponding period last year.
The oil segment faced the brunt of the decline, with exports plunging by SAR 30 billion or 26% within the same timeframe. March 2022 saw oil exports amount to SAR 113.1 billion, which declined to SAR 83.1 billion in March 2023. Consequently, the proportion of oil exports to total exports diminished from 79.6% in March 2022 to 78.3% in March 2023.
In contrast, non-oil exports, which include re-exports, experienced a year-on-year decline of 21% to SAR 23 billion from SAR 29 billion in March 2022. However, on a month-on-month basis, non-oil exports witnessed a modest increase of SAR 1.5 billion or 7.2%.
Meanwhile, the Joint Organisations Data Initiative (JODI) reported that Saudi Arabia’s crude oil exports in March edged up by 1% to 7.52 million barrels per day (bpd) compared to 7.46 million bpd in February. Despite this slight increase, the overall export figures still faced significant headwinds due to the broader decline in oil trade.
Conversely, merchandise imports displayed a contrasting trend, rising by 10% or SAR 5.5 billion in March 2023, totaling SAR 62 billion compared to the previous year. This increase in imports contributed to a positive trade balance of SAR 44 billion for the country.
The decline in Saudi Arabia’s exports raises concerns about the country’s economic resilience, particularly given the prominent role of oil in its export revenue. The drop in oil exports highlights the vulnerability of the sector to various factors such as global demand fluctuations and the ongoing transition towards renewable energy sources.
Saudi Arabia’s government and policymakers may need to explore diversification strategies and promote non-oil sectors to reduce reliance on oil exports and mitigate the potential risks associated with volatility in the energy market.
