Saudi Aramco looks to become China’s biggest crude supplier

Saudi Aramco’s crude supply deals with China come as Beijing looks to reduce its reliance on US crude imports amid a trade war with Washington. Above, Aramco’s Abqaiq oil facility. (Reuters)
Updated 28 November 2018

Saudi Aramco looks to become China’s biggest crude supplier

  • New supply contracts make it very likely that Saudi Aramco next year will become China’s largest supplier
  • Russia currently accounts for the lion’s share of China’s oil imports, supplying some $23.7 billion worth of crude last year

LONDON: Saudi Aramco is moving closer to becoming China’s largest supplier after striking five new crude supply deals with Beijing.
It will help to take the total volume to 1.67 million barrels per day (bpd).
“The new supply contracts make it very likely that Saudi Aramco next year will become China’s largest supplier, a position it also held from 2006 until 2016,” the Saudi oil company said in a statement.
Russia currently accounts for the lion’s share of China’s oil imports, supplying some $23.7 billion worth of crude last year, or 14.6 percent of its total oil imports.
Top Aramco officials this month attended the first China International Import Expo in Shanghai.
The delegation included Ahmed Al-Khunaini, manager of Saudi Aramco’s Crude Oil Sales and Marketing Department, and Anwar Al-Hejazi, Aramco Asia president.
Aramco earlier agreed a crude oil supply agreement with Zhejiang Petroleum and Chemical Co. (ZPC) on the sidelines of the Asia Pacific Petroleum Conference (APPEC) in Singapore.
“Large, integrated crude-to-chemical projects like ZPC and Hengli are the future of China’s downstream industry and I am excited Saudi Aramco will be part of their success story,” said Saudi Aramco Senior Vice President Abdulaziz Al-Judaimi.
The new supply agreements are the result of Aramco’s marketing efforts that focus on customer diversification, strategic relationships, and tapping regional demand previously not supplied by Saudi Aramco, the national oil company said.
They are an important part of diversifying Saudi Aramco’s customer base and capturing a large share of China’s future incremental oil demand, which will increasingly come from private refiners.
Annual economic growth of more than 6 percent is supporting demand for oil imports in China as the country adds more refining and petrochemical capacity.
Beijing is also seeking to reduce its reliance on US crude imports amid a trade war with Washington, analysts say.
“Chinese buyers, anticipating that crude and LNG could go on the list if tensions escalate further, are looking to alternative sources,” Richard Mallinson, co-founder of London consultancy Energy Aspects, told Arab News in August.
OPEC already provides 56 percent of China’s oil imports, according to the International Energy Agency.
China’s crude imports grew year on year during the third quarter of 2018 according to data from Bloomberg NEF, despite a fall in imports coming from Iran.
China imported nearly 10 million barrels of oil per day last month.


Saudi finance minister reassures public on taxes

Updated 10 December 2019

Saudi finance minister reassures public on taxes

  • Mohammed Al-Jadaan: There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully
  • The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year

RIYADH: Saudi finance minister Mohammed Al-Jadaan pledged that there would be no more taxes or fees introduced in the Kingdom until the social and economic impact of such a move had been fully reviewed.

He was speaking at the 2020 Budget Meeting Sessions, organized by the Ministry of Finance and held in Riyadh on Tuesday, where a number of ministers and senior officials gathered following the publication of the budget on Monday evening.

“There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully, especially in terms of economic competitiveness,” said Al-Jadaan.

The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year and more than 10 percent higher than the expected budget for this year. 

Most of that increase has come from taxes on goods and services which rose substantially as a result of the improvement in economic activity over the year.

The reassurances from the minister come as the Saudi budget deficit is estimated to widen to about SR187 billion, next year, or about 6.4 percent of GDP.