China's Saudi oil imports seen up 11% next year - sources

  • Share via facebook
  • Tweet this
  • Bookmark and Share
CHINA IMPORTS: China's crude oil imports from Saudi Arabia will likely rise 11 percent next year to hit one million barrels per day (Bloomberg Images)

CHINA IMPORTS: China's crude oil imports from Saudi Arabia will likely rise 11 percent next year to hit one million barrels per day (Bloomberg Images)

China's crude oil imports from Saudi Arabia will likely rise 11 percent next year to hit one million barrels per day, a pace slightly faster than 2010 but off the heady increases in previous years, industry officials told Reuters.

China's refining expansion is expected to moderate next year and rising competition of mostly Russian oil via a Siberian pipeline means import growth for the high-sulphur Saudi oil would be limited, they said.

At one million bpd, China stands a touch behind the United States as the Kingdom's second-largest crude buyer. US Energy Information Administration data showed Riyadh supplied 1.07 million bpd in the first eight months of 2010 to the U.S., largely flat from a year earlier.

State-run Saudi Aramco has rolled over its evergreen contracts with Chinese refiner Sinopec Corp and PetroChina for next year and expects actual supplies to grow 100,000 bpd or so from this year's average of 900,000 bpd, industry officials said.

"The market was really worried earlier about 2010, which turns out to be much more robust than thought. Now we have a high base forecasting next year's growth," said an industry source with close knowledge of oil trade between Riyahd and Beijing.

"A growth of around 10 percent is both realistic and more sustainable for Saudi Arabia."

In 2008 Saudi supplies to China rallied nearly 40 percent to about 730,000 bpd, as China went through a major stockpiling year for the Beijing Olympics Games, followed by a 15-percent rise in 2009 when China added several big new refineries including one partly owned by Aramco.

China, the world's second-largest oil user, may finally enter a relatively quiet year in its long refining expansion boom that started nearly two decades ago, by possibly adding less than 300,000 bpd new working capacity next year, or just over 3 percent of China's total oil demand.

That came off an average of 400,000-450,000 bpd additions each year seen in the previous few years.

And a chunk of next year's new capacity would be processing lower sulphur oil from Russia.

The start of the China branch of East Siberian Pacific Ocean (ESPO) pipeline since earlier this month that aims to reach a full designed capacity of 300,000 bpd as early as beginning of 2011 is poised to cap the growth in competing supplies from the Middle East, traders have said.

While traders are still trying to gauge the exact amount of incremental Russian supplies, as the ESPO oil is set to replace some of the shipments now coming to China via rail, top Middle East exporters like the Saudis are facing up to the challenge.

Saudi Arabia, the most influential member of the Organization of the Petroleum Exporting Countries (OPEC), has been restoring full contracted volumes to most Asian buyers this year after curbs for most of 2009 that were applied in line with OPEC's record output cuts.

In October, OPEC made no change to formal output levels, keeping intact a supply policy that has served it well for nearly two years.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Petroleum producers shift attention from Middle East: Kemp

Petroleum producers shift attention from Middle East: Kemp

Following four decades of war, sanctions, nationalisation and...

Back in business

Back in business

Iran’s tankers are back on the oceans as sanctions on the Islamic...

A new future for Saudi Arabia?

A new future for Saudi Arabia?

The vast Wadd Al Shimal phosphate mine in the north of Saudi...

Most Discussed
  • 14
    Baby NOT on board?

    The people commenting here were all 20 years old when they were born, never cried, never screamed and never ran etc etc.

    Thursday, 21 August 2014 8:30 AM - Amer
  • 7
    CEO of Just Falafel to step down

    Just Falafel was a disaster waiting to happen. The food isn't even that good and the focus wasn't on building the brand and operations. Instead they focused... more

    Thursday, 21 August 2014 8:37 PM - milad
  • 6
    Belgium diplomat arrested for pulling veil from Qatari princess

    If its illegal to dress in a certain way why didnt the police do something about it.

    Whereever the Europeans go, they demand that society conforms... more

    Thursday, 21 August 2014 8:37 PM - Ghazi