KSA is Revising its oil export Strategy to China and the US

During recent months, Saudi Arabia ramped up its oil export policy to China. How dramatic is the change? Let’s have a graphical look taken from TankerTrackers.com (an oil tanker tracking firm).

The Kingdom of Saudi Arabia’s crude shipments to China became doubled up during the recent year. Whereas, during the same time, its exports of oil to the United States declined by about two-thirds. According to the statistics of TankerTrackers.com, that tracks shipments and oil tankers based on satellite images and automatic identification systems of ships, KSA exported a massive 1802788 bpd (barrels per day) to China during last month as compared to 921,811 bpd in August 2018.

On the other hand, oil exports to the United States were 262,053 bpd in July 2019, which is about 62% down from 687,946 bpd in August 2018. Sanctions of the United States on the oil of Iran assisted the shift. Leading Asian energy importers such as China forced to switch business away from Iran, third-largest oil producer according to OPEC and start purchasing more Saudi oil to make up for that deficit.

Saudi Arabia put on the brakes towards the United States

Director of commodity research at ClipperData, Matt Smith, said that in 2017, Kingdom of Saudi Arabia learned from the last production cut of OPEC that they got the most significant bang for their buck by cutting flows to the most transparent and most prominent market, the United States. Stopping back on flows to the United States was the best method to put down inventories and turn around bearish sentimentality, and they are hiring the same tactic once again.

KSA is Changing its oil export Strategy to the US and China

Figures of ClipperData, which is different from the statistics of TankerTrackers because of different tracking techniques still shows United States imports of Saudi crude oil in July drops about over 60% from October 2018. Smith said for the moment that as Saudi Arabia decelerate to the most apparent market, it is exporting more oil to China.

Read Also: Oil Prices May Drop by $30 per Barrel if China Buys Iranian Oil

The market has mainly traded on weekly United States numbers that up until the satellite imagery growth to give increased transparency on worldwide stocks, gives the best actual picture of the market circumstances. Halff said that instead of the best availability of market inventory internationally, thanks to the satellite statistics, the aim of impacting the United States stock metric appears to stay actual for OPEC in overall and KSA in real. Right or wrong, it is the standard that everybody watches.

LEAVE A REPLY

Please enter your comment!
Please enter your name here