Saudi Arabia Cut Oil Flows To China While Meeting Most Asian Requests
Saudi arabia–Saudi Arabia will provide some Chinese buyers with less crude oil for next month while fulfilling requests from many other customers in Asia after OPEC (Organisation of the Petroleum Exporting Countries) and its allies pledged to speed up production hikes.
According to Bloomberg, Japan, South Korea, Thailand and India will get the crude oil volumes they wanted, with some even getting extra supplies. However, China will receive less crude oil than they asked for next month.
Asian buyers asked for more oil
Many Asian buyers asked State-run marketer Saudi Aramco for more oil this week. Aramco wants to fulfil their request. Aramco also doesn’t provide buyers with a reason why crude volumes are cut.
Meanwhile, China and India continue to be big buyers of Russian crude oil even after Russia’s invasion of Ukraine. They have been ramping up purchases of Russian cargos at bargain prices.
Saudi Arabia raises July crude oil prices
Reportedly, buyers are finding Saudi cargoes more affordable than supplies from the North Sea and the United States, despite an increase in prices from the Kingdom.
Saudi Arabia raised July crude oil prices for Asian buyers to higher-than-expected levels amid the Russia-Ukraine war. The hike by Saudi Aramco came despite an agreement by OPEC+ states to boost output by 648,000 barrels per day in July. This week, Saudi Aramco also raised its OSP (official selling price) for European and Mediterranean buyers.
Saudi Arabia’s oil and gas sector accounts for about 50 per cent of gross domestic product (GDP) and about 70 per cent of export earnings. Reportedly, oil reserves in Saudi Arabia are the second largest in the world.
Crude oil prices have risen significantly this year. Bloomberg said prices have risen more than 50 per cent so far in 2022. Oil prices were determined by global supply and demand, rather than any country’s domestic production level.