Saudi Arabia’s crude oil supply to China is expected to decrease to approximately 36.5 million barrels in December, trade sources reported on Monday. This marks a second consecutive month of decline and the lowest volume since July. The supply for December is down from an estimated 37.5 million barrels in November and about 46 million barrels in October, according to trade data analyzed by Reuters.
Lower Demand from Chinese Refiners
China’s state-owned oil companies, including Sinopec, PetroChina, and Sinochem, are set to purchase less crude in December. However, Saudi Arabia’s supply to the Fujian refinery, a joint venture, will see a rebound as the plant is scheduled to complete maintenance and resume full operations.
The reduction in demand from China follows a decision by Saudi Aramco, the state oil company, to lower the official selling prices for all crude grades supplied to Asia in December.
Slowing Refining Activity in China
China’s overall refining activity is expected to decline in the last quarter of the year due to weak profit margins and lower fuel consumption in road transport. Saudi Arabia remains China’s second-largest crude oil supplier, following Russia.
Saudi Exports to China Down in 2023
In the first nine months of this year, Saudi crude exports to China dropped by 10.8%, totaling 59.52 million metric tons (1.58 million barrels per day), compared to the same period last year, according to Chinese customs data.
Other North Asian Markets
Outside of China, two additional North Asian refiners will receive their full Saudi crude allocations for December, the sources noted.
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