Saudi Arabia is not ceding ground in its important markets in Asia amid the OPEC cuts, and has regained its position as top oil supplier to China in January, overtaking Russia which was last year’s biggest supplier to China after having pushed the Saudis from the top spot, according to data by the Chinese General Administration of Customs on February 24, 2017.
In January 2017, Russia was overtaken not only by Saudi Arabia, but also by Angola, China’s 2nd biggest oil supplier.
Saudi Arabia’s exports to China jumped by 18.9 % from a year ago in January to 1.18 million bpd.
Angola’s exports to China soared 63.5 % to 1.17 million bpd, winning it 2nd place, whereas the winner of the 2016 exports race - Russia - came in 3rd place, shipping 1.08 million bpd to China in January, up 36.5 % on the year.
Last year, Russia overtook Saudi Arabia as China’s biggest supplier of crude oil thanks in large part to increased demand from independent refineries, popularly called teapots.
The average Russian exports to China in 2016 stood at 1.05 million bpd, up by 25 % from 2015.
Saudi Arabia’s shipments last year inched up 0.9 % to 1.02 million bpd.
Now the OPEC cuts have made the Middle Eastern crude grades more expensive and the Brent/Dubai and WTI/Dubai spreads narrower, which is making traders ship more crude oil from West Africa to Asia, and the Russian grade Urals to China, which would not have been a profitable shipment if it were not for the arbitrage window.
Although it is overcomplying with the OPEC deal and has cut exports to some clients - mostly to regions other than Asia - Saudi Arabia has been keeping full supplies to Japan and South Korea, and slightly cutting to Southeast Asia.
However, for March 2017, Saudi Aramco’s major buyers in both Northeast Asia and Southeast Asia are set to receive full-term allocations for Saudi crude oil, S&P Global Platts reported last week, citing traders it had contacted.
