The analytic report published by the Oilprice shows that Chinese buyers of oil, including state-oil companies and independent refiners, imported a total 1.26 million barrels per day (bpd) of oil from Saudi Arabia in July, a record low that have come mainly as a result of high benchmark prices set by Persian Gulf Arab producers for orders placed in April.
For two years, Saudi Arabia has been either the number-one or number-two oil supplier to China, the world’s top oil importer.
However, a slump in global oil prices that began in March and continued into April, mainly a result of a price war between Saudi Arabia and Russia and the subsequent decline in demand for oil because of the coronavirus pandemic, pushed many Chinese buyers to look for ultra-cheap oil.
That caused imports into China from America to surge at the expense of Saudi Arabia. In fact, imports from the United States and Brazil increased in July, showing that Chinese preferred supplies that took almost 45 days to reach the country from America over the cargoes on the shorter route between the Middle East and China.
The report predicted that Saudis would have to wait for months to be able to capture their previous share of the Chinese market. It cited economic data as showing that supply of crude from the US and Brazil into China would continue to be strong in August and even in September as the Chinese buyers have continued to be price-conscious earlier this month when they chartered tankers for future deliveries.