【By Observer Net, Yuan Jiaqi】

On July 11 local time, Reuters cited five trade sources saying that Saudi Arabia's crude oil exports to China will reach the highest level in more than two years in August.

According to distribution data from Chinese refiners, the world's largest oil company, Saudi Arabian Oil Company (Saudi Aramco), will deliver about 51 million barrels of crude oil to China in August, an average of 1.65 million barrels per day.

Data from global energy market data provider Kpler shows that this supply volume has increased by 4 million barrels compared to July, reaching the highest level since April 2023.

The sources mentioned that Sinopec will receive more crude oil in August. This Asian largest refiner is gradually increasing its processing capacity after completing maintenance at multiple factories in the second quarter. The amount of crude oil allocated to other Chinese refiners remained the same as last month. As of now, Saudi Aramco and Sinopec have not commented on this.

The report pointed out that Saudi Arabia announced on Sunday to raise crude oil prices for Asian and European buyers in August by more than $1 per barrel. This move is partly due to expected increase in domestic crude oil demand in Saudi Arabia, and also because of potential growth in China's crude oil consumption.

After the spot market premium soared in June due to the conflict between Iran and Israel, Asian refiners also applied to Middle Eastern oil producers to increase long-term crude oil supplies for August and September.

Additionally, OPEC+ lifted previous voluntary production cuts and reached an agreement to increase production by 548,000 barrels per day in August. The increase in Saudi Arabia's crude oil supply to China is also related to this.

However, in an unnoticed corner, one country quietly broke apart — the United States.

According to a U.S. media report published on July 3, China has not purchased any U.S. crude oil for three consecutive months, which is the longest "zero purchase" period since 2018.

According to official U.S. government survey data released last Thursday, China, the world's largest crude oil importer, did not purchase any U.S. crude oil in May, consistent with the situation in March and April. The U.S. overseas crude oil sales volume, losing its Chinese sellers, plummeted to the lowest level in over two years.

U.S. crude oil exports hit a new low in more than two years. Bloomberg chart

The report said it was a blow for U.S. shale oil producers. Because these producers rely on exporting oil overseas to maintain their operations and avoid an oversupply of crude oil in the U.S. domestic market.

To make things worse, these producers also need to face WTI prices falling below $70 per barrel, as well as OPEC considering resuming part of its crude oil production due to easing geopolitical tensions.

As Saudi Arabia tries to regain market share from U.S. shale oil producers, OPEC and its allies announced they would resume capacity, making global oil market competition increasingly fierce.

Some U.S. media also mentioned that meanwhile, on July 2 local time, the U.S. revoked the restrictions on ethane exports to China. However, the recovery of ethane trade brought little comfort to U.S. crude oil producers. Unless U.S.-China relations ease or oil prices rise, U.S. shale oil producers will still face a difficult situation.

On June 25, when asked about President Trump's statement that he hoped China would buy U.S. oil, Chinese Foreign Ministry spokesperson Guo Jiakun responded at a regular press conference that China will take reasonable energy security measures according to its national interests.

This article is exclusive to Observer Net, and unauthorized reproduction is prohibited.

Original: https://www.toutiao.com/article/7525727898368508468/

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