Russia piped Saudi Arabia as China’s leading supplier of crude as the struggle to gain maximum market share in the second largest oil consumer in the world steps up.
According to data released by General Administration of Customs in Beijing on Tuesday, in May, a record 3.92 million metric tons of crude was imported by China from its northern neighbor. That means an approximate 927,000 barrels per day. This is a hike by 20 per cent compared to past months. Sales in Saudi dropped 42 per cent to 3.05 million tons from April.
China is soon becoming a major market for global exporters of oil given that the U.S., who is the largest consumer of crude in the world, does not have to rely too much on overseas supplies since it has been getting an increasing output from the shale fields right from North Dakota to Texas. The country with the highest population will make up for over 11 per cent of the global demand this year, according to predictions made by the International Energy Agency in Paris this month.
Chief oil market analyst at London based consultant Energy Aspects Ltd. Amrita Sen said that this is an obvious indication that Asia is spoilt for choice lately, now that Middle Eastern crude will have to compete with oil supplied from other regions. She further said that Russia has been focusing on the East and the numerous deals made between China and Rosneft are projected to witness more crude from Russia head permanently toward China.
For the first time since October 2005, Russia is the leading supplier of crude to China, as it looks for new and emerging markets for its crude. In 2013, OAO Rosneft agreed to supply 365 million tons of crude to China National Petroleum Corp. over a course of 25 years as part of a US$270 billion deal.