April 11, 2025 [Reuters]- Saudi Arabia’s crude oil supply to China will surge in May from the month before as a sharp price cut by the kingdom boosts demand, sources said on Friday.
State oil firm Saudi Aramco will ship about 48 million barrels to China in May, a tally of allocations to Chinese refiners showed, up from April’s 35.5 million barrels.
The figure marks the highest since at least 2024 and the first increase in Aramco’s allocation to China since the beginning of this year, according to Reuters data.
Chinese state major Sinopec, China National Offshore Oil Corp (CNOOC) and private refiner Shenghong Petrochemical will all be lifting more Saudi crude in May, the sources said.
Aramco and CNOOC did not immediately respond to emails seeking comment on their May allocation. The other firms were not immediately reachable for comment.
The increased lifting is in line with market expectations amid lowered prices and a planned output boost by OPEC+, a group that pumps more than 40% of the world’s oil.
On Sunday, Aramco cut the May official selling price (OSP) for flagship Arab Light crude to $1.20 a barrel above the average of Oman and Dubai prices, down $2.30 from the April OSP.
That’s a four-month low for the premium over Oman and Dubai prices and also close to the lowest in four years. The reduction in the premiums follows a surprise decision by OPEC+ to boost output by 411,000 barrels per day in May, triple the expected increase.
The increase in supply and concerns about future demand fuelled by an escalating trade war between the U.S. and China have driven oil prices to a four-year low this week.
“The combination of lower benchmark prices and sharp cuts in OSPs provides term lifters some relief by reducing feedstock costs,” said LSEG senior analyst Anh Pham.
“Also, abundant oil supplies could help stabilise prices, particularly if sanctions further restrict supplies from Venezuela or Iran,” he added.
Saudi Arabia is the second largest crude supplier to China after Russia.
China imported 84.3 million barrels of crude from Saudi in the first two months of this year, down by 13% from the 96.6 million barrels in the same period a year earlier, Chinese customs data showed.
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