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Saudi Arabia was again the single biggest oil supplier to China in 2022, despite a surge in Chinese purchases of crude from Russia, which stayed second-placed on the list of top suppliers to the world’s largest crude oil importer.
China imported around 1.75 million barrels per day (bpd) of crude oil from Saudi Arabia in 2022, basically flat on the year, according to data from the General Administration of Customs of China cited by Reuters.
Chinese crude oil purchases from Russia averaged 1.72 million bpd last year, up by 8% compared to 2021 as China’s refiners took advantage of cheaper Russian crude which was shunned by many Western buyers after the Russian invasion of Ukraine.
China’s imports of crude oil from the United States slumped by 31%, the customs data cited by Reuters showed, while imports from Malaysia nearly doubled last year. Malaysia is widely considered to be a point of ship to ship transfers of crude from Iran and Venezuela, which China continues to import, but mostly rebranded as pointing to other origins so that the parties involved can avoid U.S. sanctions.
China, which hasn’t joined the coalition of countries observing the G7 price cap on Russian crude oil of $60 per barrel, has largely ignored so far the price cap mechanism and has bought Russian crude at deep discounts. While China hasn’t joined the Price Cap Coalition, the fact that a price cap now exists gives the world’s top crude oil importer, as well as other buyers of Russian crude such as India, more bargaining power to negotiate steep discounts for the Russian crude even outside the price cap mechanism, analysts say.
Still, Saudi Arabia is expected to remain one of China’s biggest, if not the biggest, crude oil supplier. Last month, China and Saudi Arabia agreed to expand crude oil trade as they upgraded their relations to a strategic partnership during the visit of Chinese President Xi Jinping to the Saudi capital Riyadh.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
Moreover, if it is claimed that China’s refiners took advantage of cheaper Russian crude, then logic dictates that they would have continued buying the cheaper Russian crudes in increasing volumes rather than buying more of Saudi crudes at higher prices.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert