Chinese refiners seek less Saudi crude as demand weak
Several Chinese refiners have asked Saudi Aramco to reduce December-loading crude oil volumes, two sources close to the matter said, as COVID-19 restrictions and a faltering economy have weakened fuel demand in the world’s biggest oil importer.
The refiners sought to trim supplies for December by about half of the previous month’s level, the sources said, asking not to be named because of the sensitivity of the issue.
Following Beijing’s rigid COVID curbs, average refining rates at state-owned refineries fell to around around 70% between May and August. They have recovered to about 75%, compared to more than 80% in normal times, data compiled by China-based consultancy Zhuochuang showed.
China’s crude oil imports in October recovered to the level last seen in May, supported by stockpile demand at two new refineries preparing for commercial operation.
Apart from the reduced demand, China has been buying Russian crude oil priced at steep discounts after the Ukraine crisis, squeezing out other suppliers, including Saudi Arabia.
Saudi Aramco did not immediately respond to a Reuters’ request comment, which was made outside office hours.
Saudi Aramco has cut its December selling prices for its flagship Arab Light crude and told at least four refinery customers in North Asia they will receive full contract volumes of crude oil in December.
Source: Reuters (Reporting by Muyu Xu; Editing by David Goodman and Barbara Lewis)