Saudi crude exports to China impacted by OPEC deal - report

05/01/2018 Argaam

 

Saudi Arabia's oil exports to China will likely remain 'under pressure' for coming months, as the Kingdom grabs lion's share of ongoing OPEC, non-OPEC supply cuts, BMI Research said in a new report.

 

Last month, Chinese customs data showed that Russia remained its top exporter of crude oil for the ninth month in a row in November. Saudi Arabia took the second place with shipments down by 7.8 percent to 1.056 million barrels per day (bpd).

 

In the first 11 months of 2017, Russia’s supplies to China increased by 15.5 percent year-on-year to 54.77 million tons, or 1.2 million bpd, higher than Saudi Arabia by 159,000 bpd.

 

"The cartel's decision to extend the cut to end-2018, coupled with the growing role of Saudi Arabia in managing the global market (particularly amid continued output growth from the US) will likely keep the Kingdom's exports to China in check for some time," said the report.  

 

It added that the second Sino-Russia oil pipeline (SR-II) will enable Russia to stake a stronger claim to the large and growing Chinese crude oil market.

 

The 942.0-kilometer pipeline, which opened on Jan.1, will link oil from Russia's East Siberia-Pacific Ocean pipeline to the Chinese city of Daqing, and run parallel to the existing SR-I that stretches from Russia's Skovorodino to China's Mohe County, Heilongjiang province.

 

SR-II will double China's oil import capacity from Russia to 30 million tons from 15 million tons per annum, the report said.

 

Beijing raised 2018 crude oil import quotas by 53 percent from 2017 levels to 142.4 million tons from 93.2 million tons.

 

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