Saudi Arabia to Ship Record Crude Volumes to China in January Amid Price Cuts

Saudi Arabia is set to deliver its highest volume of crude oil to China in three months, with an expected 46 million barrels slated for January. This marks a significant increase compared to the 36.5 million barrels projected for December. The surge comes after Saudi Arabia decided to reduce its oil prices for Asia, fueling a rise in demand from Chinese refiners.

The move follows two consecutive months of price cuts by Saudi Arabia, which have boosted demand for its crude in China. Refining giants Sinopec and PetroChina, along with private refineries like Rongsheng Petrochemical and Shenghong Petrochemical, are anticipated to ramp up their crude intake from the Kingdom.

The price reductions by Saudi Arabia are largely in response to weakening demand and lower global oil prices, as well as growing uncertainty surrounding Iranian oil supply in China. In addition, the price cut for Saudi Arabia’s Arab Light crude, which will see a reduction in the premium to the Oman/Dubai average, reflects the challenges facing the global oil market.

Saudi Arabia's move to lower its prices is part of a broader strategy to maintain its foothold in the Asian market, especially as China remains the world's largest crude importer.