Saudi industrial production dips in September amid decline in oil refining activity

Industrial production in Saudi Arabia declined in September, primarily impacted by a slowdown in oil refining activity. Data released by the General Authority for Statistics on Sunday showed that the Industrial Production Index (IPI) registered a modest year-on-year decrease of 0.3%.

The data indicated that mining activity remained steady in September compared to the same period in 2023, with Saudi oil production holding steady at approximately 9 million barrels per day. Meanwhile, the manufacturing sector recorded a 0.5% annual drop, becoming the largest contributor to the overall decline in the index.

Saudi Arabia continues to uphold oil production restrictions following an agreement with eight OPEC+ countries to extend additional voluntary cuts of 2.2 million barrels per day through the end of the year. These cuts are expected to be phased out gradually on a monthly basis beginning in January 2025.

Among industrial activities, the coke coal and refined petroleum products sector saw the largest production decline, falling by 12.3% and exerting the greatest downward pressure on the index. Conversely, the food industry registered a 12.3% increase, and chemical production volumes rose by 2%.

In comparison, the IPI had recorded a 1% year-on-year increase in August 2024, driven by growth in mining, manufacturing, and supplies of electricity, gas, steam, and air conditioning.