Saudi crude sales to China forecast to halve in May

Saudi Arabia’s oil exports to China are expected to halve in May due to the Middle East conflict, according to a news report.

Crude sales to China are likely to reach 20 million barrels next month, down from 40 million barrels allocated for loading in April, Bloomberg reported, quoting unidentified traders.

Lower sales are driven by Saudi Aramco’s decision to raise crude prices due to the Iran war, which has led to the near-closure of the Strait of Hormuz, the report said.

Oil prices climbed on Monday after US-Iran peace talks failed and the US Navy imposed a blockade on ships entering and exiting Iranian ports via the strait. On Tuesday, prices eased as Washington said it continued to engage with Tehran.

Saudi Arabia’s energy ministry said the East-West pipeline is operating at “full capacity” again after damage had cut 700,000 barrels per day of flow. It also said output at the Manifa offshore field – which had lost 300,000 bpd – had been restored, while repairs at the Khurais field, east of Riyadh, are ongoing.

According to US bank JP Morgan, more than 60 energy assets across the Arabian Gulf states and Iran have been affected by the conflict, as reported by the Financial Times. 

Further reading:

• Oil up 7% as US set to block ships from Iranian ports
• Why Hormuz is no Suez or Panama
• The Hormuz islands that hold sway over global energy