Saudi Oil Market Share in China Set for Rebound

The market share of Saudi Arabian crude in China is set to rebound next month, according to unnamed trade sources cited by Reuters earlier today.

Saudi crude oil exports to China have been on the decline for four consecutive months, the report noted, adding some traders expected this to change in August, with imports from the kingdom rising for the first time since May.

In July, Saudi oil exports to China totaled 36 million barrels, which comes in at a little over 1 million bpd, Reuters also reported, citing shipping data from Kpler. For August, however, some traders expect a total of at least 44 million barrels, Reuters said.

Saudi Arabia used to be China’s biggest supplier of oil but last year Russia replaced it at the number-one spot. In 2023, Russia shipped 107.02 million metric tons of crude to China, which was a 24% increase on 2022. Saudi Arabia, on the other hand, exported 85.96 million tons to Chinese buyers last year, which was a 2% decline on 2022. The kingdom remains the biggest oil supplier to Asia as a whole.

The news about a Chinese Saudi oil import rebound comes soon after another report that saw Saudi oil exports in total falling to the lowest in ten months in June amid higher domestic consumption during peak demand season and continued strong Russian shipments to Asian clients the country shares with its OPEC+ partner.

The expectations of higher Chinese imports of Saudi oil also come on the heels of the news, as reported by Reuters, that Riyadh would cut official oil prices for Asian clients for the second month in a row. Its flagship Arab Light blend for August loadings would be the lowest since March, Reuters noted in its report. Per traders, Saudi oil has become more affordable now after months of excessive pricing.

By Charles Kennedy for Oilprice.com

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