Thursday, February, 22, 2024 12:24:02

Saudi Arabia’s national petroleum and natural gas company, Saudi Aramco has recently announced plans to ink five crude oil supply agreements (COSAs) with Chinese companies, taking the size of its prior established 2019 supply agreement to 1.67 million bpd (barrels per day).

Reports from Gulf News suggest that the deals would be a boon for Saudi Arabia, as they would manage to dislodge Russia and stand as a top crude oil supplier to China.

For the record, China imports an average of 8.4 mbpd of crude oil, followed by the United States at 7.9 million bpd and India with 4.93 million bpd. The country bought around $162.2 billion (Dh595.6 billion) worth of crude oil from Aramco in 2017, which accounts for around 18.6% of total crude oil imports of the world.

Incidentally, the value of crude oil China purchased from Russia in 2017 increased by 20% over 2013’s figures to $23.7 billion, in direct contrast to Saudi Arabia, whose crude oil exports to China fell 51% to $20.5 billion during the same period.

Aramco added that the present crude oil supply agreements size is unprecedented in China, as rarely has a single country purchased such large quantities of oil in the company’s history. The new supply contracts make it obvious that Saudi Aramco in 2019 will become China’s largest crude oil supplier, a position it also held from 2006 until 2016, it said.

In addition, Aramco has also signed a Memorandum of Understanding (MoU) with the China National Offshore Oil Corporation (CNOOC) for an optional 100,000 barrels per day in additional supply, bringing the total signed volume with CNOOC to 723,000 bpd.

Commenting on the agreement, Ahmad A Al Subaey, VP of Marketing, Sales and Supply Planning at Aramco, said that the supply agreements validates Saudi Aramco being a trusted supply choice for world-class refiners and that the company is firmly committed to its Chinese market.