Chinese refiners are asking for less oil from Saudi Arabia, with the drop possibly pointing to a reshuffle of global flows as more Russian crude becomes available, according to Energy Aspects Ltd.
A decline in so-called nominations for term cargoes from Saudi Aramco for September loading, led by trading-giant Unipec, indicated some Chinese refineries were holding back from purchases given the greater availability of Russia’s Urals, as well as comfortable stockpiles, the London-based consultant said in an Aug. 11 note, without saying how it got the information.
Indian nominations for September, meanwhile, increased from a month earlier as the country seeks alternatives to Russian crude following Western pushback.
The global oil market has zeroed in on a possible reordering of some crude flows after the US and European Union ramped up pressure against India over its imports of Russian energy. Given there’s been no comparable move against China, that’s raised the possibility that more of Moscow’s oil will be taken by mainland refiners, including Urals, which ships from Russia’s west.
Saudi Aramco is set to sell 43 million barrels of contractual supplies of September-loading crude to China, traders informed by the producer told Bloomberg. That compares with 51 million barrels a month ago, and a monthly average of about 45 million so far this year.
Chinese interest in Urals is picking up given it remains the “most competitive” compared with similar Middle Eastern crudes, Energy Aspects said. Still, there’s a limit to China’s appetite given Russian imports account for 17 percent of overseas supplies, with 20 percent seen as a cap for a single country, it added.
Sinopec, the Beijing-based parent company of Unipec, didn’t reply to an email seeking comment outside working hours.
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