S. Arabia crude oil exports to China expected to drop

Saudi Arabia’s crude oil exports to China are expected to drop for the third consecutive month in July, reaching about 36 million barrels due to plant maintenance and refiners favoring cheaper oil sources.

This highlights the challenge of maintaining market share in China, the largest global importer of crude. July’s exports are anticipated to decrease from around 39 million barrels in June, potentially marking the lowest levels for the year.

Both state-owned and private refiners have reportedly reduced their nominations for Saudi crude in July compared to June. Despite Saudi Aramco lowering official selling prices for its crude exports in Asia for the first time in five months, Chinese refiners continue to scale back imports due to high prices and unfavourable margins.

Sinopec, Saudi Arabia’s primary customer in China, is expected to maintain import volumes at similar levels in July, though they are the lowest recorded this year. Customs data from last month showed a 16.5 per cent decline in China’s Saudi oil imports during the first four months of the year, while imports from Russia, the leading supplier, increased by 16.6 per cent during the same period.

Separately, Saudi Aramco will supply full contractual volumes to at least three other North Asian refiners in July, the sources said. This trend reflects the impact of former CEO Bernard Looney’s sudden departure last year.

Attribution: Reuters.