Saudi Arabia regains top spot in China crude supply

Beijing—Saudi Arabia, the world’s biggest oil exporter, regained its position as China’s top crude supplier in June, after losing out to Russia over the previous three months, customs data showed. China imported 4.569 million tons of crude from Saudi Arabia in June, or 1.112 million barrels per day (bpd), down 14.2 percent on the year but beating 961,000 bpd in May. Saudi imports edged up 0.24 percent in the first six months of the year versus a year ago to an average of 1.06 million bpd.
Russian exports to China have benefited from good demand by independent refiners since late 2015 after the country allowed them to import crude for the first time. China imported 4.107 million tons, or around 999,420 bpd, of crude in June from Russia, down from a record 1.24 million bpd in May. Russian imports rose 35.3 percent in the first half to 1.05 million bpd, just behind Saudi Arabia.
“Beijing is probably quite pleased with the competition for shares of China’s crude oil market,” said Washington-based China energy expert Erica Downs of the Eurasia Group. “The government doesn’t want to be too dependent on any one supplier, so competition between major suppliers is a welcome development, especially if it results in lower prices.” Nicknamed “teapots” due to their relative smaller scale, independents contributed more than half of China’s 930,500 bpd incremental crude buys during the first half. Stockpiling to boost government reserves was another driver for imports, as new tanks became available.
Imports from Iran rose 16.1 percent in June over a year earlier to 780,175 bpd, up from 671,176 bpd in May. Imports for the January-June period gained 2.5 percent. Shipments have held relatively steady as Tehran has been focusing on recouping lost markets in Europe after sanctions were lifted, Iranian oil sources say. Sharp gains in Chinese imports also came from smaller OPEC producer Kuwait as well as Venezuela. Kuwait supplied 45 percent more in June at 1.336 million tonnes, or 325,100 bpd. Supplies from Venezuela shot up 88 percent in June and for the first six months rose 35.5 percent to 9.936 million tonnes, or 398,500 bpd. While China’s total crude imports in June were the lowest on a daily basis since February, at 7.45 million bpd, refined fuel exports were the second-highest on record at 4.22 million tons, suggesting a growing fuel surplus. Thursday’s data showed China’s gasoline exports hit a record high at 1.1 million tons in June, more than double a year ago.—Reuters

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