Saudi crude oil exports to China will rebound in August to at least 44 million barrels, up from around 36 million barrels in July, according to several trade sources. This increase comes after Saudi Aramco, the state energy firm, made deep price cuts to support demand.
The rebound in Saudi crude oil exports to China will help the kingdom regain its share in the largest oil import market. Saudi exports to China tumbled in June to 1.12 million barrels per day, the lowest since March 2020, according to data from analytics firm Kpler.
Chinese buyers of Saudi oil include Zhejiang Petrochemical, Sinopec, Sinochem, and PetroChina. Separately, Saudi Aramco will also supply full contractual volume to at least three other North Asian refiners in August.
The increase in Saudi crude oil supply to China comes just days after Saudi Aramco cut prices for August-loading crude to Asia for a second month, with its flagship Arab Light crude price at its lowest since March. One of the sources said the August official selling prices (OSPs) for Saudi crude were more reasonable than in previous months, when Saudi term supply was priced higher than other grades sold on the spot market.
The move to boost crude oil exports to China is seen as an effort by Saudi Arabia to regain its market share in the world’s largest oil importer. The kingdom has faced increased competition from other suppliers, including Russia, in the Chinese market in recent months. The price cuts and increased supply are likely aimed at making Saudi crude more attractive to Chinese buyers.