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Saudi exports to China slip on Russia’s discounted oil

Oil shipments from Saudi Arabia totalled 1.89 million bpd in August, down 5.5% from a year earlier Aramco
Japan, the world's fourth-largest crude buyer, imported 2.7 million barrels per day last year, of which over 90 percent came from the Middle East

Russia maintained its spot as China’s top crude oil supplier in August, Chinese government data showed on Wednesday, even as discounts on Russian crude continued to narrow and Moscow cut exports.

China’s imports from Russia – including supplies via pipelines and seaborne shipments – jumped 26 percent from August last year to 10.54 million metric tonnes, or 2.48 million barrels per day (bpd).

This is the second-highest amount on record, according to data from the General Administration of Customs.

Russian arrivals over the first eight months of the year were up a quarter from a year earlier to 71.21 million tonnes.

Shipments from Saudi Arabia totalled 8.01 million tonnes, or 1.89 million bpd, down 5.5 percent from a year earlier, but rising from 5.65 million tons in July.

Saudi exports to Asian refiners continue to be depressed by higher official selling prices, with the price for Asian refiners of the kingdom’s signature Arab Light grade having risen by 20 cents to $3.20 a barrel over Oman/Dubai in August.

Saudi Arabia’s ongoing unilateral cuts saw output reduced by one million bpd through August, and Riyadh has announced it will extend the cuts until the end of the year.

Meanwhile, Moscow pledged that it would reduce crude exports by 500,000 bpd in August, and later announced it would extend cuts of 300,000 bpd until the end of the year.

Tightening supply and strong demand from Indian and Chinese independent refiners has seen the discount on sanctioned Russian crude narrow sharply.

August-delivery Espo shipments were priced at around a $4 per barrel discount to the ICE Brent benchmark, versus $6 for July delivery cargoes and $8.50 for shipments delivered in March, according to trading sources.

Imports from Malaysia, used as a trans-shipment point for cargoes from Iran and Venezuela, soared 70 percent from a year earlier to 5.73 million tons, or 1.35 million bpd in August, the third largest supplier after Russia and Saudi Arabia.

China’s imports of US crude reached nearly 400,000 tonnes, up from zero a year earlier and taking the year-to-date volume to 9.85 million tonnes, more than doubling the year-ago amount.