Saudi crude oil to China to surge in May after price reduction, said the source
The supply of Saudi Arabian crude oil to China will surge in May from the previous month as a sharp price cut by the kingdom to increase demand, the source said on Friday.
Saudi State Oil Company Aramco 2222 will send around 48 million barrels to China in May, the calculation of allocation for Chinese refiners shows, up from 35.5 million barrels of April.
This figure marks the highest since at least 2024 and the first increase in the allocation of Aramco to China since the beginning of this year, according to Reuters data.
The state of China Major Major Sinopec 600028, China National Offshore Oil Corp (CNOOC) and Private Shenghong Petrochemical will all lift more Saudi crude oil in May, the source said.
Aramco and CNOOC did not immediately respond to emails looking for comments about their May allocation. Other companies cannot be reached immediately to comment.
Increased appointment is in line with the expectations of the market in the midst of price declines and the increase in output planned by OPEC+, a group that pumps more than 40% of the world’s oil.
On Sunday, Aramco cut the official selling price of May (OSP) for the main Arab light raw ship to $ 1.20 per barrel above the average price of Oman and Dubai, down $ 2.30 from April OSP.
That is the lowest level of four months for premiums over the price of Oman and Dubai and also close to the lowest in four years. Premium reduction follows a surprise decision by OPEC+ to increase output by 411,000 barrels per day in May, three times the expected increase.
Increased supply and concerns about future demand triggered by the increase in the trade war between the US and China has pushed oil prices to the lowest level of four years this week.
“The combination of lower benchmark prices and sharp cuts in OSPS provides appointment of some assistance by reducing the cost of raw materials,” said Senior LSEG and ANH PHAM analyst.
“Also, abundant oil supply can help stabilize prices, especially if further sanctions limit the supply of Venezuela or Iran,” he added.
Saudi Arabia is the second largest supplier of crude oil to China after Russia.
China imported 84.3 million barrels of crude oil from Saudi in the first two months of this year, down by 13% from 96.6 million barrels in the same period the previous year, Chinese customs data showed.
Source: Reuters
