China Guzzles Saudi Arabian Oil While Riyadh Keeps U.S. Flow Low
(Bloomberg) -- To get a sense of the global oil market, Saudi Arabia’s exports to the world’s two biggest importers are a good place to start.
Last month, the kingdom directed at least 1.8 million barrels a day of crude oil to China, the highest deliveries since a surge in buying back in April and May when prices crashed, tanker-tracking compiled by Bloomberg shows. Meanwhile, daily exports to the U.S. slumped to a paltry 97,000 barrels.
For China it reflects the nation’s faster recovery from the coronavirus pandemic -- refineries there are snapping up imports to satisfy strong domestic fuel demand. In the case of the U.S., Riyadh has been curbing deliveries for many months, attempting to telegraph to the market that it will target the buildup of stockpiles in the world’s most transparent major market.
Total Saudi crude flows edged higher in October, to 6.24 million barrels a day, in large part because of flows toward Asia. October shipments to the U.S. could still rise a little because some vessels still don’t have final destinations.
Early last month, Saudi Arabia raised November prices for its flagship oil to Asia, a sign of an expectation of market strength.
Chinese buying may also take a leg higher soon too: on Monday, the country said it will boost 2021 oil-import quotas for private companies by 20%.
©2020 Bloomberg L.P.