Saudi Arabia’s loss of oil market share in
China last month to Russia and Iraq is likely to be fleeting,
with analysts saying shipments from the kingdom to Asia’s
largest economy are rebounding in May.
Saudi crude exports to China could more than double to 10
million tons this month from April, according to ship-tracking
firm Vortexa Ltd., with lead Asia analyst Serena Huang saying
they will dwarf Russian seaborne volumes.
The world’s biggest oil exporter is typically the biggest
source of China’s crude imports, but its cargoes to the country
slumped 41% last month from March, according to tanker tracking
data compiled by Bloomberg. That put it in the unusual position
of being the third-biggest supplier behind Russia and Iraq for
seaborne shipments.
The forecast increase in cargoes to China comes even as
Saudi Aramco cuts the amount of crude it allocates to Asian
buyers in line with the OPEC+ deal to curb output. However, the
state-owned company was even more aggressive in reducing the
amount of oil it supplies to U.S. and European customers.
See also: Saudi Oil Rush Threatens to Disrupt Stabilizing
U.S. Oil Market
“It was clear that Saudi was targeting to increase its
market share in the West during April,” said Rahul Kapoor, head
of commodity analytics and research at IHS Markit in Singapore.
“Saudi is now reducing output and shipments, but is expected to
focus on China again.”
China’s recovering economy also looks set to benefit Saudi
suppliers after demand uncertainty from the coronavirus
advantaged Russian producers. Chinese independent refiners
bought spot volumes from Russia’s eastern ports last month as
the shorter-delivery period offered greater flexibility , said
Liu Yuntao, an analyst at Energy Aspects in London.
(Bloomberg)