Oil market: China and Saudi Arabia adjust trade

In March, oil supplies from Saudi Arabia to China will decrease to 41 million barrels, compared with 43.5 million barrels in February. The reduction is due to Saudi Aramco's price increase to its highest in two years. This is the second consecutive decline in shipments to the Chinese market. 

China's Sinopec and the Fujian plant associated with Aramco will reduce oil purchases, but supplies for PetroChina and Shenghong Petrochemical will be increased. Last week, Saudi Aramco raised the price of Arab Light oil by $2.40, bringing it to $3.90 per barrel, the highest level since December 2022. The price increase is due to increased US sanctions, which have complicated oil exports from Russia, and increased transportation costs.

OPEC+, which accounts for half of global oil production, will maintain production cuts in the first quarter of 2024, with a possible increase in production from April. Saudi Arabia, remaining the second largest oil supplier to China after Russia, exported 78.64 million tons of oil in 2024, which is 8.5% less than a year earlier.