Crude oil exports from Saudi Arabia to China are expected to increase substantially next month, thanks to the sizable price cut by the Saudis, Reuters reported today, citing unnamed sources.
Volume allocations to Chinese refiners reveal that Saudi exports in May will rise to 48 million barrels from the 35.5 million barrels scheduled for delivery this month. Saudi Arabia cut the official selling prices for its oil sharply ahead of a production boost set for next month. The sharpest cut was made for the price of oil sold in Asia, with flagship Arab Light set to be $2.30 per barrel cheaper in May, at a premium of $1.20 per barrel over the Dubai/Oman benchmark.
‘;
document.write(write_html);
}
This is the deepest price cut in over two years, Reuters reported earlier in the week. The move comes amid the oil price rout that followed President Trump’s announcement of a flurry of tariffs on all trade partners, notably China, which is the world’s largest oil importer. China retaliated promptly with its own tariffs on all U.S. imports, including oil and gas, adding pressure to prices.
Saudi Arabia is the second-largest oil supplier to China after Russia. Meanwhile, China’s imports from Iran increased substantially in March as importers sought to stock up ahead of a possible further tightening of U.S. sanctions on Tehran. According to data from Kpler, Iranian crude accounted for 13% of China’s total imports of crude last month. In absolute terms, Iranian imports rose to 1.37 million barrels daily, up from 747,000 barrels daily in February.
On the other hand, U.S. crude oil exports to the world’s largest importer have shriveled and are about to stop altogether. So far this year, American crude oil has accounted for only about 1% of the imports of China, the world’s top crude importer. But the tariff war that U.S. President Donald Trump launched against China in early February dissuaded the remaining Chinese buyers from buying U.S. crude oil.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com
- Cautious Calm in Canada’s Oil Patch as Prices Slide
- Consumer Prices Unexpectedly Drop as WTI Plunges by Over 4%
- Shell Starts Production at Dover Field in Gulf of Mexico
