Saudi Arabia to supply full quantities of crude to Asia in August, ‎Chinese demand declining again

Several informed sources said today, Tuesday, that Saudi Aramco has informed some customers in North Asia that it will provide them with all the quantities of crude oil specified for the month of August, while demand from China has declined again.

According to “Reuters”, the Kingdom, the world’s largest oil exporter, said last week that it would extend production cuts by one million barrels per day for another month until August, and raised the prices of most types of crude that it sends to Asian customers for the second month in a row.

Four trade sources said Chinese refiners, some state-owned and some huge independent refineries, ordered less supply in August.

According to the sources’ estimates, the total quantity may be about eight million barrels less than what they obtained in July

China’s purchases of Saudi crude recorded a low level in June and July, as refiners sought to find cheaper alternatives through the spot market after the rise in Saudi oil prices.

It is expected that Chinese refineries will purchase additional shipments in arbitrage operations from the West African and Latin American regions, with the narrowing of the difference between the materials priced on the basis of both Brent and Dubai crude.

Meanwhile, China’s onshore commercial crude oil inventories reached nearly 980 million barrels by the end of June, about 20 million barrels below the record level set in August 2020, according to data analysis firm Vortexa.