Chinese Majors Cut Saudi Volumes in July: Energy Intelligence

Three Chinese majors have cut their July loading Saudi term volumes by a combined 10 million barrels after Saudi Aramco released Asian crude export formula prices that many described as unjustifiably high according to Energy Intelligence reports.

• Aramco raised the July OSP to Asia to a six-month high after Saudi pledged to cut production by a further 1mn bpd to 9mn bpd in July.
• Higher prices for Saudi crude could negatively impact Asian margins with some refiners outside China and India having little flexibility of supplies. China and India have the option of buying cheaper Russian oil instead – something they appear to be doing.
• Reuters reported at the start of the week that Aramco had informed five customers in North Asia they would receive full July nominated volumes while some Chinese state-owned refiners had requested lower supply in July.