The world’s biggest oil exporter, Saudi Arabia, saw its crude oil sales to the world’s top oil importer, China, surge by 76 percent year on year in October, driven by increasing demand and U.S. sanctions restricting Chinese imports of Iranian and Venezuela crude.
According to data from China’s General Administration of Customs, cited by Reuters, Chinese imports of Saudi crude oil jumped by 76.3 percent to 1.98 million bpd last month, cementing Saudi Arabia as the top supplier of oil to China. To compare, Chinese imports of Saudi crude averaged 1.12 million bpd in October last year, and 1.74 million bpd in September 2019.
Refinery start-ups and stabilizing refining margins drove China’s total crude oil imports to a record high in October, according to Chinese customs data from earlier this month.
The world’s top oil importer increased its crude intake in October by 11.5 percent compared to the same month last year, to an average of 10.72 million barrels per day (bpd), according to Reuters calculations based on China’s government data.
Despite fluctuating refining margins in recent months and a glut of refined oil products, demand for crude in China continues to grow, also thanks to Hengli Petrochemical, which had a new refinery start up earlier this year and ramped up to full 400,000-bpd capacity at the end of May. Another 400,000-bpd refinery, of Zhejiang Petrochemical, began operations, further pushing demand for crude. Related: Is China’s “Clean Coal” A Lie?
For two years after 2016, Russia was the single biggest supplier of crude oil to China, but Saudi Arabia has recently regained its number-one supplier status to China.
In October, Saudi Arabia kept its number-one position ahead of Russia, Iraq, Angola, and Oman.
China continued to import oil from Iran in October, with volumes stable compared to September, despite the U.S. crackdown on Chinese tanker companies dealing with Iranian oil.
China’s direct imports from Venezuela, however, are expected to have dropped to zero amid the U.S. sanctions.
By Tsvetana Paraskova for Oilprice.com
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China’s insatiable oil demand for both domestic use and also for exporting refined products knows no limits with its oil imports projected to hit 11 million barrels a day (mbd) this year.
China continues to defy US sanctions and import increasing volumes of both Iranian and Venezuelan crude. Moreover, China has also been helping Venezuela increase its crude oil production and refining throughput while Russia has been helping it sell its crude and get paid for it.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London