Saudi Aramco to Decrease Oil Supply to China Amid OPEC+ Production Plans
Saudi Aramco is set to lower oil supplies to China, providing 34-36 million barrels for April, a decrease from 41 million in March. This marks the lowest supply since early last year amid OPEC+ plans to boost production. The reasons for reduced sales remain unclear, potentially linked to demand fluctuations amidst trade tensions affecting energy markets.
Saudi Aramco is preparing to reduce its oil supply to China, delivering the lowest amount in several months, despite ongoing plans by OPEC+ to ramp up production. According to data from Bloomberg, the state-owned oil company will supply between 34 million and 36 million barrels of crude for April loading to Chinese customers, compared to 41 million barrels in March. This figure would mark the lowest supply to China since at least the first half of the previous year.
The quantities of monthly sales to China are crucial for numerous refiners in the region, as they rely on these deliveries, which are solely sold through long-term contracts. The volumes provided not only influence procurement strategies for refiners but also affect their subsequent purchases of crude on the spot market from other producers such as Iraq, the United Arab Emirates, and those from West Africa.
Recent official selling prices from Aramco were lower than analyst predictions in a Bloomberg survey. Currently, it remains unclear whether the reduction in supply is due to diminished requests from Chinese clients or an intentional cutback by Saudi Arabia.
The decline in Aramco’s supply occurs amidst OPEC+ efforts to increase output, anticipated to begin next month, signaling potential for a series of moderate supply boosts. This situation, alongside growing concerns over energy demand influenced by the US-led trade tensions, has affected crude futures negatively. Interestingly, three other refiners beyond China have reported receiving the full amount of crude they requested, while Aramco has not commented on this development.
In conclusion, Saudi Aramco’s impending reduction of oil supplies to China, despite OPEC+ plans for increased production, may reflect either diminished demand from Chinese customers or strategic cuts from Saudi Arabia. This shift impacts the stability of oil purchases from other producers and the dynamics of the Asian refining market amidst uncertainties regarding energy demand related to global trade tensions. The upcoming changes in OPEC+ production strategies could significantly influence market trends.
Original Source: news.az
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