seaborne crude oil flows keep on changing, with China having recently emerged as major buyer of US crude oil. In its latest weekly report, shipbroker Intermodal said that “the recent commitment from Russia and Saudi Arabia to production cuts, coupled with Saudi Aramco’s consecutive increase in OSPs to Asian customers, has prompted Asian buyers to seek alternative sources of crude oil. Notably, in June alone, China’s imports of U.S. crude soared to 3.05 million mt, representing a remarkable 354% y-o-y increase and reaching the highest volume recorded since December 2020, as per data from the General Administration of Customs China (GACC). Similarly, the narrow Brent/Dubai EFS spread, which made Brent-linked crude highly attractive in the Asian market, paired with low freight rates, has facilitated increased shipments of crude oil from Brazil to China”.
According to Intermodal’s Research Analyst, Ms. Chara Georgousi, “looking ahead to Q3, the market’s concern lies in Chinese refiners’ future actions, influenced by crude prices. Should OPEC+ succeed in bolstering prices through output restrictions, it is anticipated that Chinese refiners might curtail some of their crude imports, opting instead to draw from existing inventories to fulfill any potential surge in domestic demand. Conversely, if prices maintain stability around the $75 per barrel mark, it is probable that China will sustain its crude oil imports at relatively robust levels”.
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