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Saudi Arabia Becomes China’s Largest Oil Supplier in November

Saudi Arabia Becomes China’s Largest Oil Supplier in November

Tuesday, 25 December, 2018 - 07:30
General view of the Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. (Reuters)
London - Asharq Al-Awsat
Saudi Arabia overtook Russia as China's largest crude oil supplier in November, breaking Russia's 19-month streak, data from China’s General Administration of Customs showed on Monday.

Last month, Saudi Arabia supplied 6.56 million tons, or 1.596 million barrels per day (bpd) of oil, up 50 percent from a year earlier, according to the data.

Russia came in second place at 6.55 million tons, or 1.593 million bpd, of crude in November, up 30 percent from a year earlier.

Saudi Arabia, the world's biggest oil exporter, is trying to expand its market share in China this year, with demand from new Chinese refiners pushing the Kingdom back into contention with Russia.

Reuters reported that Saudi Aramco signed five crude supply agreements that will take its 2019 contract totals with Chinese buyers to 1.67 million bpd.

China also resumed crude imports from the US after a halt in October as the trade conflict between the two countries showed signs of thawing. Data showed that imports were only 33,558 barrels in November, down 88 percent from a year earlier.

Iranian supplies last month were 388,726 barrels, falling 30 per cent from the same period last year. China's waiver on US sanctions on Iran allows it to buy 360,000 bpd of oil for 180 days.

Meanwhile, oil markets continued to fall following concerns regarding the global economy and increased supply.

On Monday, Brent crude was down 80 cents, or 1.49 percent, at $53.02 a barrel, after jumping to $54.66 a barrel initially.

US west crude futures fell $1.07, or 2.35 percent, to reach $44.52 a barrel, up from the lowest level since September 2017 at $44.41 a barrel.

The benchmark crude fell more than 35 percent from their October peak.

The decline in prices prompted US shale producers to cut back on their drilling plans for next year. The surge in US shale production enabled the country to rank first among the world's oil producers, ahead of Saudi Arabia and Russia.

The macroeconomy and its impact on oil demand continue to put pressure on prices. Global stock markets fell amid fears of a slowdown in trade flows, especially in the shadow of the US-China trade war, the world's two biggest economies. Despite signs of a slowdown in US supplies, global production is still outpacing demand.

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