• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 6 days The United States produced more crude oil than any nation, at any time.
  • 5 days How Far Have We Really Gotten With Alternative Energy
  • 41 mins e-truck insanity
  • 3 days Bad news for e-cars keeps coming
  • 5 days China deletes leaked stats showing plunging birth rate for 2023
  • 6 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
U.S. Crude Is Dominating Global Oil Markets

U.S. Crude Is Dominating Global Oil Markets

Surging U.S. crude exports, particularly…

New Mexico Struggles To Balance Oil Output Boom with Climate Goals

New Mexico Struggles To Balance Oil Output Boom with Climate Goals

The second-largest oil-producing U.S. state,…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Saudi Aramco Bets On Continuous Growth Of Chinese Oil Demand

  • Saudi Aramco announced this week two major refinery and petrochemical deals in China.
  • Saudi Arabia is betting on continued Chinese oil demand growth.
  • The two deals give Aramco a long-term export outlet to 690,000 bpd of Saudi crude to China.

The world’s largest crude oil exporter, Saudi Arabia, is betting big on the growing market for crude China, as Saudi oil giant Aramco is strengthening its downstream presence and crude supply market share in the world’s top importer.  

Saudi Aramco announced this week two major refinery and petrochemical deals in China, which not only give the world’s largest oil firm a share of the Chinese downstream market but also an additional export outlet for 690,000 barrels per day (bpd) of Saudi crude in China.   

With the two agreements, Saudi Arabia is betting on continuous growth in Chinese oil demand on the one hand. On the other hand, the Kingdom is looking to boost its market share in the world’s top oil importer, where its partner in the OPEC+ pact, Russia, has gained market share with cheap crude after the Russian invasion of Ukraine and the sanctions on Moscow that followed. 

Saudi Arabia and Russia have been neck and neck on the Chinese oil market for years, but the fight for market share has become more contested since the war in Ukraine began as Russia pivoted to Asia and now bets on China and India as the key buyers of its crude, often offered at wide discounts to international benchmarks. 

Saudi Arabia sells its crude oil under long-term contracts, so it has a guaranteed share of the Chinese market. But Russia, having pivoted to Asia for crude and fuel sales after the Western sanctions, is offering its oil at discounts and could attract more Chinese buyers who don’t abide by the G7 price caps.

Russia was the single largest crude oil supplier to China in January and February, overtaking Saudi Arabia, which was the number-one supplier of oil to China last year. Related: $11 Trillion Investor Group Urges Members Not To Fund New Oil And Gas Projects

As China accelerated the buying of cheap Russian crude oil at discounts to international benchmarks, Chinese imports of crude from Russia jumped by 23.8% year over year to 1.94 million bpd in January and February 2023, per data by China’s General Administration of Customs cited by Reuters.

While Russia pushes to sell its crude—banned in the West—in Asia at discounts, Saudi Arabia is locking in long-term demand in China with stakes in refining and petrochemical projects. 

A Saudi Aramco joint venture plans to build a $10-billion refining and petrochemical complex in China over the next three years, the Saudi oil giant said on Sunday. The complex in northeast China will have the capacity to process 300,000 bpd, of which Aramco will supply 210,000 bpd. 

The project “represents a major milestone in our ongoing downstream expansion strategy in China and the wider region, which is an increasingly significant driver of global petrochemical demand,” Mohammed Al Qahtani, Aramco Executive Vice President of Downstream, said on Sunday. 

On the following day, Aramco said it would buy 10% in private refiner Rongsheng Petrochemical for the equivalent of $3.6 billion and would supply 480,000 bpd of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical Co. Ltd (ZPC), under a long-term sales agreement. 

The two deals give Aramco a long-term export outlet to 690,000 bpd of Saudi crude to China, which would boost Saudi Arabia’s market share by locking in contracts for the coming years and decades. 

The acquisition “demonstrates Aramco’s long-term commitment to China and belief in the fundamentals of the Chinese petrochemicals sector,” Aramco’s Al Qahtani said. 

“It also promises to secure a reliable supply of essential crude to one of China’s most important refiners,” the executive added.  


Russia may be attracting Chinese buyers with cheaper spot cargoes, but Saudi Arabia is playing the long game with long-term contracts to lock in oil sales for decades. 

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News