Saudi Aramco is set to supply the lowest amount of oil to China in several months, even as the OPEC+ cartel gears up to boost output.
The state-owned Saudi Arabian major will send 34 million to 36 million barrels of April-loading crude to customers in China, the world’s biggest importer, according to data compiled by Bloomberg. That compares with 41 million for March, and a figure below 36 million would be the smallest since at least the first half of last year.
Aramco’s monthly sales to Asia, and in particular to China, are an important source of supply for many refiners across the region. The volume of the shipments, which are sold only via long-term contracts, determines how much crude these processors will need to buy on the spot market from producers including Iraq, the United Arab Emirates and West Africa.
The latest official selling prices offered by Aramco were lower than expected in a Bloomberg survey. At present, it’s unclear if the drop in sales is due to lower requests for cargoes from Chinese customers, or a reduction in supply from the kingdom.
The decline in the Saudi volumes comes as the Organization of the Petroleum Exporting Countries and its allies aim to restore output from next month, kicking off the first of what could be a long series of modest supply increases. That move – coupled with wider concerns about the potential impact on energy demand from the US-led trade war – have weighed on crude futures.
Three other refiners outside of China said they received all of the crude that they had requested. Aramco’s press office didn’t respond to an email seeking comment.
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