After Saudi Arabia raised crude prices to Asia, China seeks to buy immediate Iraqi crude
China, the world's largest importer of crude, imported 10.88 million bpd in March, up from a four-month low of 9.51 million bpd in February, but still well below 11.54 million bpd in January.
The jump last month can be largely attributed to increased demand from refineries as pollution restrictions were lifted after the Beijing Winter Olympics in February, and with increased demand for fuel after the Lunar New Year holiday.
However, it should be noted that China lowered export quotas in its first allocation of 2022, cutting them by 56% to 13 million tons, as part of efforts to reduce pollution and ensure domestic supplies.
Saudi Arabia’s decision to raise the official selling price (OSP) for shipments loaded in May to Asia to a record premium compared to the Oman/Dubai regional benchmark is likely to act as an additional obstacle to China’s imports, causing some Chinese refineries to order smaller quantities in May from Saudi Arabia. , the largest supplier of crude to China, the record Saudi official sale for the month of May will encourage refiners in Asia to take as little as possible from Saudi oil and seek to buy alternatives in the spot market.
Chinese refiners may seek more Middle Eastern crude from spot sellers such as Iraq and Oman, but they can also buy from the United States and West Africa because the spreads make these grades more competitive.
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