China To Receive 40% More Oil From Saudi in Sept

China is expected to buy around 40% more crude from Saudia Arbia in September versus August via term contracts amid the start up of China’s Rongsheng mega refinery according to traders.

• Chinese refiners are expected to receive about 52 million barrels in oil cargoes next month, up from around 37 million barrels this month. Companies are allocated barrels after making supply nominations to Saudi Aramco following monthly pricing for its crude.
• The increase coincides with the start of a new supply contract for Rongsheng Petrochemical Co., which entered into a 24.6 billion yuan ($3.4 billion) deal earlier this year with Aramco that included a stake and an agreement to sell crude to the Chinese refiner. Saudi Arabia has so far committed in giving full contractual cargoes to its Asian buyers, even after extending its supply cuts,
• China’s state-owned refiners plan to increase processing rates to a record this month, according to OilChem. That boost to operations also contributed to the higher nominations, traders said.
• Outside of China, Aramco gave full contractual volumes to other refiners in South Korea, Taiwan and Thailand for September. Robust flows to the region signal Aramco’s pledged cuts could impact buyers more significantly elsewhere.