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Russia was the biggest exporter of crude oil to China last month, for the second month in a row, Reuters reported, citing Chinese customs data. Saudi Arabia came second, but its exports to the world’s top importer fell by 300 percent in August.
Russia shipped 1.37 million bpd to China last month, down both on the month and on the year but ahead of Saudi Arabia’s average of 1.24 million bpd.
Russia was also China’s top oil supplier for the first eight months of the year, according to the customs data. It exported 57.1 million tons of crude to China during that period or an average of 1.72 million bpd. This was 15.6 percent higher than the same period of 2019, while Saudi exports to China during the same period were 6.1 percent higher than a year earlier.
China’s oil imports are one of the most closely watched indicators for oil price movements. After the country ended its lockdowns in the spring, imports began to recover and so did prices. In fact, China ramped up oil imports so strongly, it prompted analysts to make upbeat projections about the recovery of oil demand. And then imports began to slow down as China’s storage space filled and demand both at home and internationally fell short of expectations.
In May and June, China imported record volumes of crude oil, as the import-dependent nation sought to benefit from the low oil prices in April. The record-breaking crude oil imports supported oil prices through the late spring and summer when oil demand recovery in the rest of the world had just started and then wobbled amid concerns of a second COVID-19 wave.
China’s August imports were lower than those in July and expectations are for a further slowdown this month and in the next few amid high inventory levels and weak refining margins.
By Tom Kool of Oilprice.com
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Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations