Saudi Arabia, the world’s largest crude oil exporter, is poised to reduce its crude oil exports to China in September.
This expected decline follows a surge in August, where exports reached a more than two-year high.
The primary driver for this impending reduction is Saudi Arabia’s decision to increase the official selling prices (OSPs) for its crude grades, according to a Reuters report.
Saudi Aramco, the state-owned oil giant of Saudi Arabia, is projected to dispatch approximately 43 million barrels of crude oil to China in September.
This substantial allocation translates to an average daily shipment of 1.43 million barrels per day, a figure meticulously compiled from a detailed tally of allocations designated for various Chinese refiners, according to the report.
This marks a decrease from the 1.65 million bpd allocated in August.
Sources indicated that several companies, including Sinopec, Asia’s leading refiner, and its Fujian Refinery joint venture with Saudi Aramco, intended to decrease their Saudi crude liftings in September.
PetroChina and Shenghong Petrochemical are expected to slightly decrease their September volumes compared to August.
Indian refiners navigate supply uncertainty
Despite growing geopolitical uncertainties surrounding Russian crude oil imports, several Indian refiners have secured their full allocated volumes for September.
This comes in the wake of renewed warnings from Trump against purchasing oil from Moscow, a stance that has previously complicated global energy markets.
Sources familiar with the matter indicated to Reuters that these refiners, rather than seeking additional supply, were content with their assigned quantities.
This suggests a level of confidence in the current supply chains and perhaps a strategic approach to managing potential disruptions.
The decision to not request more supply, even amid the backdrop of US pressure, highlighted the complex balancing act Indian energy companies face as they aim to secure affordable and reliable crude sources while navigating international sanctions and diplomatic relations.
The consistent allocation of full volumes for September points to either pre-existing long-term contracts that are being honored or a deliberate decision by suppliers to maintain stable flows to a key market like India, irrespective of external political pressures.
The situation underscores the intricate web of global oil trade, where economic realities often clash with geopolitical agendas.
Hike in prices
Last week, Saudi Aramco announced its September crude oil prices for Asian customers, marking the second consecutive month of increases.
This decision reflects a robust demand outlook from the crucial Asian market, which continues to be a primary driver of global oil consumption.
The price hike is particularly significant as it often serves as a benchmark for other Middle Eastern crude exporters, signaling broader market sentiment and supply-demand dynamics.
Arab Light, the leading crude, saw its price increase to $3.20 a barrel over the average Oman/Dubai quotes, marking its highest premium since April, according to Reuters data.
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