[Your shopping cart is empty

News

Will China’s Appetite For Saudi Oil Return?

China’s crude oil imports from Saudi Arabia are unlikely to materially increase in the near term despite tanker-tracking evidence that arrivals rose in the first half of August, analysts say.  
Early this month, global imports of Saudi crude grades showed signs of recovery, after hitting fresh lows in July, Jay Maroo, Head of Market Intelligence & Analysis (MENA) at Vortexa, wrote in a note last week.
Most of the monthly rise in Saudi crude imports in August arrivals has been due to higher imports from the core buyers in Asia—China, Japan, India, and Taiwan. Those major oil importers are on track to collectively raise imports of Saudi crudes by 1.2 million barrels per day (bpd), putting totals at historical upper ranges, according to Vortexa’s estimates.
“For China and India, rising Saudi crude imports are also overlaid with the backdrop of Russian Urals becoming scarcer and less favourable in pricing,” Maroo said.
Despite the uptick in observed Chinese imports of Saudi crude in early August, China’s purchases of Saudi oil are expected to remain depressed through the third quarter, which includes the months of July, August, and September, analysts told Reuters earlier this week.  
“We expect Chinese imports of Saudi crude will maintain a slight downward trend in the third quarter this year,” Xi Jiarui, a crude oil analyst with China-based commodities consultancy JLC, told Reuters.
Saudi Arabia continues to trail its OPEC+ partner Russia in terms of crude oil deliveries to China.
Despite higher oil prices and narrower discounts of Russian crudes to international benchmarks, Russia remained the single largest crude oil supplier to China in July, ahead of Saudi Arabia, according to Chinese customs data.
Chinese imports of crude from Russia averaged 1.9 million bpd last month, a 13% increase compared to July 2022, although arrivals from Russia were lower than the record-high hit in June, per the data released by China’s General Administration of Customs on Sunday and reported by Reuters. In July, Chinese crude imports from Russia again exceeded those from Saudi Arabia, which dropped by 14% from July last year and fell by 31% from June 2023, according to Reuters calculations based on China’s official figures.
While Chinese demand for Saudi oil is likely to remain depressed in the short term, analysts expect to see a recovery in the long term.
By Tsvetana Paraskova for Oilprice.com
Aug 28, 2023 13:27
Number of visit : 160

Comments

Sender name is required
Email is required
Characters left: 500
Comment is required