By Charles Kennedy – Mar 13, 2025, 9:30 AM CDT
Despite the expected rise in OPEC+ production in April, Saudi Arabia is set to ship significantly lower crude oil volumes to China next month to levels not seen in over a year, Reuters reported on Thursday, quoting trade and industry sources.
Spring maintenance at some large state-controlled refineries in the world’s top crude oil importer is the key reason for the low volumes that Saudi Arabia has allocated for April.
These amount to about 34 million barrels, down from 41 million barrels allocated for March, according to Reuters data.
State giant China Petroleum and Chemical Corporation, or Sinopec, is planning to shut down for about two months the crude processing capacities at several refineries. These temporary closures from the middle of March to the end of May would affect about 700,000 barrels per day (bpd) of crude processing capacity, per data compiled by Reuters from trade and industry sources.
The decline in Saudi shipments to China next month comes despite OPEC+ preparing to raise production by 138,000 bpd from April and Saudi Arabia reducing its official selling prices (OSPs) for crude oil to Asian buyers next month.
Chinese maintenance and reshuffled crude flows for Russian oil after the initial shock from the U.S. sanctions suggest that the call on Saudi crude for April may not be as high as in the previous two months, when uncertainties over the cheaper Russian supply were high.
A massive reshuffle of tankers allows non-sanctioned vessels to pick up trade with Russian and Iranian oil, which will result in a rebound in China’s imports of cheaper crude from the two producers in March, from a two-year low in February, analysts and traders told Reuters at the end of last month.
The sanctions on Russia, as well as the tightening sanctions on Iran’s shadow fleet, have prompted a run on non-sanctioned vessels, with daily rates doubling and even tripling over the past month.
These rate hikes have attracted operators of non-sanctioned tankers to enter the trade with Russian and Iranian oil amid handsome profits being made.
By Charles Kennedy for Oilprice.com
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