he world’s largest oil exporter, Saudi Arabia, significantly raised its crude sales to the world’s largest oil importer, China, in 2019, boosting its exports to China by 47 percent and beating Russia for the top Chinese supplier spot for the first time in four years, according to Chinese customs data as carried by Reuters on Friday.
While Saudi Arabia restricts production under the OPEC+ deal, it has prioritized shipments to the most prized markets, China and Asia, at the expense of exports to markets such as the United States. In addition, Saudi oil giant Aramco has recently signed supply deals with at least two independent refiners, opening a new avenue for its oil sales in China, according to Reuters. Previously, Saudi Arabia exported oil to China only under long-term deals with the state-held corporations.
So in 2019, Saudi Arabia exported a record volume of crude oil to China, 1.67 million bpd, according to Chinese customs data and Reuters’ calculations from tons into barrels. The 47-percent surge made Saudi Arabia the top crude oil supplier of China in 2019, ousting Russia from the top spot, which Russia had held for three consecutive years through 2018.
In 2019, Russia’s sales on the Chinese market also jumped to a record, but not as much as the Saudi exports, apparently.
According to the customs data crunched by Reuters, Russia’s crude oil exports to China averaged 1.55 million bpd in 2019, up by 9 percent annually, thanks to the ESPO crude grade which was in demand with independent Chinese refiners.
China’s imports of crude oil from the United States in 2019 slumped by nearly half compared to 2018 due to the trade war and the 5-percent tariff on U.S. crude oil China slapped in September. China didn’t import any oil from the U.S. in December 2019, according to the customs data. Yet, analysts expect that China could resume buying U.S. oil now that it has promised to increase its energy imports from the U.S. by US$52.4 billion in 2020 and 2021 on top of the 2017 energy import levels. In 2019, China continued to import Iranian oil, in much lower volumes, but in defiance of the U.S. sanctions. China, however, avoided imports from Venezuela in December 2019—for a third consecutive month—as the main customer China National Petroleum Corporation (CNPC) wants to steer clear of any potential secondary U.S. sanction if it imported Venezuelan oil.
