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China’s imports of Saudi Arabian crude hit new high

China’s imports of Saudi Arabian crude hit new high

China’s crude imports from Saudi Arabia surged 76% year on year to hit new high of 1.99 million b/d in October, while there were no arrivals from Venezuela in the month, according to the latest data from the General Administration of Customs showed Monday.

Saudi Arabia delivered 8.41 million mt of crude oil into China in October, despite the expectation that some shipment loadings could have been delayed due to the earlier attacks on the supplier’s key facilities in mid-September.

The volume was 21% higher than the supplies of 6.97 million mt from China’s second-biggest supplier, Russia, and Saudi Arabia’s last record high shipment of 7.79 million mt recorded in August 2019, GAC data showed.

Sources with knowledge of the matter have previously said that state-owned Saudi Aramco tried to ensure sufficient supplies after the attack.

Meanwhile, imports from Venezuela fell to zero in October. The last time when there were no shipments from the South American producer was October 2010.

Flows are expected to fall further in the fourth quarter.

In September, state-run PetroChina said it would suspend the direct purchase of crude oil from Venezuela in accordance with US sanctions on the South American producer.

A company source with close knowledge of the matter previously told S&P Global Platts that direct imports of Venezuelan crude, almost all heavy sour, were officially due come to an end from October. PetroChina was the top importer for Venezuelan crude in China.

Venezuela remained the 10th largest crude supplier to China in January-October, although volumes were down 21% year on year to 11.41 million mt or 275,020 b/d, GAC data showed.

US DELIVERIES

China received 908,422 mt (214,798 b/d) of crude oil from the US in October, up 75% from September despite Beijing having announced a 5% levy on US crude from September 1.

In contrast, China did not import any US crude in October 2018, when the trade tensions between the two countries were escalating.

“A 5% confirmed tariff since September is better than not knowing what the next move in the trade dispute will be,” a Beijing-based trader said.

Flows are likely to continue in November, as the drop in benchmark crude prices could help absorb the impact of the tariff and an open arbitrage window for US crude to China is still possible, traders said, adding that an oversupplied market has left traders with alternative barrels to tap into.

Shipments from Iran edged down 1.1% month on month to 532,790 mt in October, the lowest level since January 2007, when Platts started to collect China’s crude import data.

The volume was 49% lower than the 1.05 million mt in same month of last year, GAC data showed.

Most of the recent arrivals were injected into bonded SPR tanks in northeastern China Jinzhou and southern China Huizhou, market sources said.

China imported 233.24 million mt of crude from OPEC in January-October, up 11% year on year.

Supplies from Asia Pacific, Europe and South America rose 33%, 17% and 11%, respectively, year on year during the first 10 months of 2019.