China reduces purchases of Saudi Arabian oil – Commerzbank
Saudi Arabia is likely to deliver significantly less crude oil to China in September, Commerzbank's commodity analyst Carsten Fritsch notes.
Chinese refineries tend to prefer other Russian oil grades
"This was reported by Reuters, citing trading sources. According to the report, deliveries are expected to amount to 1.43 million barrels per day. In August, daily shipments were still at 1.65 million barrels, the highest level in more than two years. The reason for the decline is the recent increase in official selling prices by Saudi Arabia. This has caused some refineries in China to reduce their purchases."
"The question now is whether alternative suppliers will emerge. Russian Urals oil is reportedly being offered to state-owned and private refineries in China at reduced prices, according to Bloomberg, citing traders familiar with the matter. However, these deliveries are said to be for October. This comes against the backdrop of refineries in India no longer purchasing this oil due to US pressure."
"China still seems willing to do so. However, Chinese refineries tend to prefer other Russian oil grades such as ESPO for geographical reasons and because of lower transportation costs."
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FXStreet Insights Team
FXStreet
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