Beijing: Russia overtook Saudi Arabia as China’s top oil supplier last year for the first time ever amid the ongoing battle for market share in the world’s biggest energy market.
Russia boosted crude supply to the Asian nation by 24% from 2015 to 52.5 million metric tons, or 1.05 million barrels per day, according to data released on Monday by the General Administration of Customs. The Middle Eastern kingdom became the second-biggest supplier, shipping 51 million tons, or 1.02 million barrels per day, little changed from a year earlier.
Russia has been tussling with Saudi Arabia for dominance in the Asian nation amid efforts by oil producers to defend market share during a worldwide glut. Chinese demand has been seen as a key to a sustainable recovery in prices, while benchmark rates are climbing from the worst crash in a generation amid output cuts by major producing nations. China last year bought the commodity at the fastest pace since 2010 amid growing appetite from private refiners, known as teapots.
“Saudis have always dominated the top supplier spot to China,” said Amy Sun, an analyst with Shanghai-based commodities researcher ICIS-China. “High imports from Russia mostly can be attributed to growing demand from teapots and strategic reserves purchase.”
The proximity of Kozmino port, from where Russia ships Siberian crude, to Qingdao, where teapots typically receive their supplies, has helped boost cargoes after the processors were allowed to use overseas oil in 2015.
“With teapots’ import growth set to continue in 2017 and the expected expansion of Sino-Russia pipeline by year-end, Russia is likely to aim for the top spot again this year,” said Sun.
Angola was the third-largest supplier in 2016, exporting 43.7 million tons, or about 875,000 barrels per day, 13% higher from last year, today’s customs data showed. China’s total crude imports climbed 13.6% last year to 381 million tons, according to customs data released on 13 January. Bloomberg