Saudi doubles oil exports to China to cover for loss of Iranian crude

Saudi Arabia’s oil shipments to China have doubled in the span of a year, while its exports to the U.S. have fallen by nearly two-thirds. TankerTrackers.com, which tracks oil tankers and shipments based on satellite imagery and ships’ automatic identification systems, said Saudi Arabia exported 1,802,788 barrels per day to China in July, compared to 921,811 in August 2018. By contrast, its exports to the U.S. in July were 262,053 barrels a day, down 62 percent from 687,946 in August of last year.

U.S. sanctions on Iranian oil have helped the shift. Major Asian importers like China have been forced to shift business away from Iran and start buying more Saudi barrels to cover the shortfall. And the U.S. is now more self-reliant than ever, thanks to its shale oil revolution, so it needs less Saudi oil. That leaves Saudi Arabia sending more crude “into the most opaque” market, China, making it hard to track market conditions, said Matt Smith, director of commodity research at commodities analytics firm ClipperData.

TankerTrackers.com co-founder Samir Madani has described China as a sort of “black hole” for the world’s oil exports, having the ability to “easily absorb oil barrels from the market, especially when prices dip.” Many analysts see a clear strategy from Beijing to take advantage of the situation, while locking in Asian market share is a key long-term goal for the Saudis.
Source: CNBC