Russia and Saudi Arabia is racing to be China’s top oil supplier in 2020, as both countries elevating their crude exports volume to the Asian’s biggest industrial country despite the slumping global demand of oil due to the coronavirus pandemic this year.
China’s top supplier last year, Saudi Arabia, has exported approximately 1.6 to 1.7 million barrel/day of crude oil in the January-November period this year, as price cuts this month boosted Saudi oil exports, as Vortexa, Refinitiv and Kpler analytics firm report showed. The figure was catching up to Russia’s 1.7 million Barrel/day export this year so far, also followed by Iraq with an approximate of 1.2 million barrel/day.
The coronavirus pandemic has hit the oil industry severely, disrupting business activities and halting the travel industry. As the world's biggest crude importer, China is one of the countries that take advantage of the low prices to increase purchases in early 2020, while the demand for fuel recovered from the second quarter slump along with countries restarting the economy.
An analyst at Vortexa, Serena Huang said that the figure shows that Russia has taken over the top position of China’s supplier from Saudi Arabia this year, but the ongoing race is very interesting as to see who will be the winner. As Saudi’s crude in China in November is predicted around 2.13 to 2.24 million barrel/day, higher than last record-high in May 2020, between 2.1 to 2.14 million barrel/day, with compiled estimations from the three analytics firms. The November volume estimates will nearly reach double previous month’s volume estimates. The volume boost started as Aramco, Saudi’s state oil giant, sharply cut prices for Asian customers in October, as the cargo for the purchase was taking a month to be shipped. While from Russia, 1.49 million barrel/day is predicted to enter China this month, a decline from 1.55 barrel/day in October.
The Saudi crude will enter China from ports in the city of Zhoushan, Quanzhou, Ningbo, Zhanjiang, said analyst from Refinitiv, Emma Li. The congestion is also starting to be observable again in Chinese ports, and there might be some additional slippage into the last month of 2020, said Kpler analyst, Richard Booth. Booth also included shipments via Myanmar in its estimation for China oil imports.
While China’s top supplier mostly keep increasing daily exports figures, Iran at the third position experience a biggest rise in exports to China so far this year. The crude volume spiked by nearly 190,000 barrel/day in the January-Novermber period, compared to full year volume in 2019.
