Saudi Aramco slashes April term supplies to China: report

Quantum Commodity Intelligence - Saudi Aramco has reduced term crude allocations to customers in China for a third month, with deliveries to its largest customer set to fall to the lowest level in a year.

According to Reuters calculations, Aramco will supply 34 million barrels to Chinese customers in April, slumping 17% from the 41 million barrels in March and 46 million barrels as recently as January.

The drop comes as Chinese refiners move into the peak Q2 maintenance season, although sluggish margins this year have already kept a lid on crude imports.

This includes around 700,000 bpd of capacity operated by Sinopec from mid-March to mid-May, including the Yangzi, Jiujiang and Gaoqiao subsidiaries.

China's refiners may also be boosting Russian purchases, with some evidence that Indian refiners are more reluctant buyers of Russian crude after a rash of new sanctions have raised the bar on Moscow-controlled imports, particularly around sanctioned shipping.

Data from Kpler revealed that loadings to China in early March have surpassed shipments India-bound for the first time since December 2023.

In the first 10 days of March, Russian crude oil loadings for India were calculated at just shy of 600,000 bpd, whereas exports for China comfortably topped 1 million bpd to China.

Meanwhile, there has been no slowdown in Iran's exports despite Washington's threat to reduce sales to zero. Chinese refiners, particularly those in the independent sector, refine almost all of Tehran's exports.

Saudi is due a small output increase in April after OPEC+ agreed to start unwinding cuts from next month.

Sources said that Aramco is likely to place additional barrels into Japan and South Korea next month, while the oil giant could also look to push more towards the US, where the tariff war could curtail Canadian and Mexican flows to the US.