Saudi Oil Sales Surge to China After Price Cuts to Lowest Level Since 2020

SadaNews - Saudi crude oil sales to China, the largest importer, for March have risen after the kingdom reduced the price of its main oil grade for buyers in Asia to the lowest level in over five years.

The state-owned oil company "Saudi Aramco" will provide about 56 million to 57 million barrels for loading next month to China, according to traders familiar with the sales, who requested anonymity due to the sensitivity of the matter. This compares to 48 million barrels the previous month.

"Aramco" Cuts Price of "Light Arabian" Oil

"Aramco" cut the price of "Light Arabian" crude to its lowest level since late 2020 amid ongoing concerns about a global oversupply, though the cut was not as significant as expected. However, the reduction has made Saudi crude more attractive in terms of pricing compared to competing barrels from other spot sellers in the region, according to traders.

Meanwhile, Indian refineries will receive at least one million barrels more in March than they usually do under long-term contracts, according to traders. This compares to at least two million additional barrels in February.

The South Asian country has faced pressure from the United States to reduce its imports of Russian oil, as U.S. President Donald Trump recently stated that India would stop purchasing as part of a trade deal. New Delhi has not publicly commented on this claim but has said it is seeking to diversify its sources and maintain energy security.

More Saudi Crude for Korea and Japan

Traders said that refineries in South Korea and Japan will also jointly receive larger quantities of Saudi oil compared to usual next month, although it was not immediately clear how that compares to February, which was at least 9 million barrels higher.

"Saudi Aramco" did not respond to a request for comment.

Larger Exports from Iraq in March

Oil exports may also increase next month from Iraq, the second-largest producer in OPEC, which markets its oil differently than "Aramco". Saudi oil is sold only through long-term contracts, while Iraq and other countries sell part of their exports on a spot or allocated basis instead of relying solely on term deals.

Traders noted that Iraq has allocated larger quantities than usual for March for what is known as non-destination-bound shipments, which are quantities that can be traded freely instead of being committed to a specific destination. This flexibility may attract greater interest from some buyers.