The world’s top oil exporter Saudi Arabia is looking to cement its top supplier position in the world’s largest oil importer, China, after Saudi Aramco signed on Thursday crude oil sales agreements with five Chinese customers for 2020, boosting expected supply by 151,000 bpd compared to this year’s supply deals.
“These agreements reflect Saudi Aramco’s efforts to strengthen its position in China and support the country’s growth in refining and petrochemicals, as well as overall energy security,” the Saudi oil giant said in a statement.
The new deals show Saudi Aramco’s continued commitment to the world’s fastest-growing oil market, said Ahmed Al-Subaey, Vice President of Marketing, Sales and Supply Planning.
Saudi Arabia was the top oil supplier to China in September, with sales of around 1.74 million bpd, nearly double from September last year.
Chinese demand from newly started up refineries and restricted exports from Iran and Venezuela have benefited Saudi sales on the top importing oil market in the world in recent months. The Saudi efforts to slash exports to the most transparent market in the world, the U.S., while raising sales to the fastest-growing market, Asia, have also allowed it to surpass Russia as a top supplier to China in recent months.
Aramco is also boosting investments in China’s downstream market.
Keeping its crude oil exports subdued in hopes of erasing the glut and propping up oil prices, Saudi Arabia has dramatically reshuffled the priority destinations of its exports, boosting sales to China and slashing shipments to the United States.
While Saudi Arabia currently slashes exports to the United States, it is looking East to build a long-term relationship on the prized Asian oil market and to lock in future crude oil demand in the region expected to show the only solid growth in demand in the coming years and decades.
By Tsvetana Paraskova for Oilprice.com
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