Saudi Arabia, the hub of oil production in the world has served China well. Be it the crude oil price crash, China didn’t bother. Right from Beijing, we are made aware that China’s crude oil imports from Saudi Arabia rose 15% in June from an year ago, as refineries ordered record volumes of the fuel in March and April when the oil prices were at an all-time low, raising the kingdoms position as the top supplier of crude oil to China. The Imports from Saudi Arabia rose to 8.8 million tons in June i.e, 2.15 million bpd. (Source: General Administration of Customs).
The Oil Price War Scenario
The Russia–Saudi Arabia oil price war of 2020, as the industrial world is aware, was an economic war triggered in March 2020 by Saudi Arabia in response to Russia’s refusal to reduce oil production in order to keep prices for oil at moderate level. This economic conflict resulted in a sheer drop of oil price over the spring of 2020. Oil production can be slowed, but not stopped completely, and even the lowest possible production level resulted in greater supply than demand; those holding oil futures became willing to pay to offload contracts for oil they expected to be unable to store.The record imports follow a price war between Saudi Arabia and Russia, the world’s top oil exporters, during March and April when the corona virus pandemic dampened demand and caused a global fuel glut. Saudi Arabia, however, delivered bigger oil cuts from June and raised crude prices as a plunge in oil prices weighed on the kingdom’s budget. China, the world’s biggest crude oil importer, took in a record 53.18 million tons last month, according to customs data.
Crude imports apart from Saudi Arabia
Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian multinational petroleum and natural gas company based in Dhahran, Saudi Arabia. It is one of the largest companies in the world by revenue, and according to accounts seen by Bloomberg News, the most profitable company in the world. But China didn’t limit itself to only imports from the largest producer in the world. China also increased inflows from Brazil, Norway and Angola, said Emma Li, analyst from Refinitiv. Shipments from Russia were at 7.98 million tons last month, or 1.95 million barrels per day (bpd), up around 7 percent from 1.82 million bpd in May and 1.73 million bpd in June 2019. Analysts expect China to see another record amount of crude imports in July as some May-loading cargoes are still underway while swelling oil inventory at major Chinese ports slows new arrivals.
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