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Beijing’s crude imports from the Gulf monarchy jumped by more than 75% in October
ByALISON TAHMIZIAN MEUSE, BIKFAYA
China has upped its imports of Saudi oil significantly, part of a bid to draw Crown Prince Mohammed bin Salman into its orbit amid an ongoing trade war with the United States.
Beijing’s crude oil imports from Saudi Arabia rose to nearly 2 million barrels per day (bpd) in October, up 24 million bpd or 76.3% compared to the previous month, Saudi daily Asharq al-Awsat reported, citing China’s General Administration of Customs.
Two new Chinese refineries – Hengli Petrochemical and Zhejiang Petrochemical – played a major role in the bump, the Saudi daily said.
While US sanctions on Venezuela, and to a lesser extent on Iran, have played a role in the Chinese leaning on Saudi Arabia for the crucial commodity, Beijing is also looking to Riyadh as a key bulwark against Trump’s trade war.
“China has an interest in making Saudi gravitate more towards it,” a Gulf-based economist told Asia Times on condition of anonymity, as he was not authorized to speak on the matter.
Beijing upping its Saudi oil imports should be seen, he said, “within the context of the trade war.”
Risk appetite in Asian markets soured on Thursday after US President Donald Trump’s approval of legislation supporting the pro-democracy protesters in Hong Kong, triggering fears of retaliation from Beijing.
The US and China are locked in a bitter trade war that has dislocated supply chains and hit economic growth across the world, and Trump’s approval of the Hong Kong legislation is expected to provoke a strong response from China.
“We urge the US to not continue going down the wrong path, or China will take counter-measures, and the US must bear all consequences,” China’s Ministry of Foreign Affairs said in a statement.
MBS looks East
For Saudi Arabia, courting China is equally important to securing its future as ties with the West, and specifically the United States – the most important alliance of its modern history – become increasingly frayed.
On a landmark visit to Beijing in February of this year, Saudi Arabia’s powerful Crown Prince Mohammed bin Salman pledged tighter economic ties with China, brushing aside the plight of the Uighur Muslims facing suppression and internment over their religious beliefs.
Saudi Aramco in parallel inked a major deal with Chinese companies NORINCO and Panjin Sincen to build an integrated oil refinery and petrochemical complex in the northeastern province of Liaoning as part of a new company, Huajin Aramco Petrochemical Co Ltd.
It also signed an MOU with Zhejiang Petrochemical – one of the key importers of Saudi crude responsible for last month’s bump.
The Saudi state-run behemoth heralded the first deal, valued at $10 billion, as an unprecedented Sino-Foreign joint venture. The Saudis are slated to provide 70% of the 300,000 bpd of crude to a planned refinery and petrochemical complex, expected to commence operations in 2024, according to a press release.
Saudi Aramco CEO Amin Nasser called the deals, “a clear demonstration of Saudi Aramco’s strategy to move from beyond a buyer-seller relationship, to one where we can make significant investments to contribute to China’s economic growth and development.”
“This is the impact of KSA’s shift into downstream business, as Aramco goes public, combined with the effects of US sanctions on Venezuela and Iran,” said the Gulf-based economist.
The kingdom is also likely trying to price out its rival, Iran, and establish a “degree of Chinese dependency” as it braces for a budget shortfall.
Saudi Arabia is expected to see its revenues drop by more than $20 billion next year, its Minister of Finance Mohammed al-Jadaan told reporters on October 31.
That is partly due to lagging oil prices, down to around $60 from over $80 the previous October.
Another major factor is that Saudi Aramco, in an effort to bolster its IPO campaign, is set to reduce its royalty structure, meaning the government will receive less taxes from its goose that lays the golden egg.
ByALISON TAHMIZIAN MEUSE, BIKFAYA
China has upped its imports of Saudi oil significantly, part of a bid to draw Crown Prince Mohammed bin Salman into its orbit amid an ongoing trade war with the United States.
Beijing’s crude oil imports from Saudi Arabia rose to nearly 2 million barrels per day (bpd) in October, up 24 million bpd or 76.3% compared to the previous month, Saudi daily Asharq al-Awsat reported, citing China’s General Administration of Customs.
Two new Chinese refineries – Hengli Petrochemical and Zhejiang Petrochemical – played a major role in the bump, the Saudi daily said.
While US sanctions on Venezuela, and to a lesser extent on Iran, have played a role in the Chinese leaning on Saudi Arabia for the crucial commodity, Beijing is also looking to Riyadh as a key bulwark against Trump’s trade war.
“China has an interest in making Saudi gravitate more towards it,” a Gulf-based economist told Asia Times on condition of anonymity, as he was not authorized to speak on the matter.
Beijing upping its Saudi oil imports should be seen, he said, “within the context of the trade war.”
Risk appetite in Asian markets soured on Thursday after US President Donald Trump’s approval of legislation supporting the pro-democracy protesters in Hong Kong, triggering fears of retaliation from Beijing.
The US and China are locked in a bitter trade war that has dislocated supply chains and hit economic growth across the world, and Trump’s approval of the Hong Kong legislation is expected to provoke a strong response from China.
“We urge the US to not continue going down the wrong path, or China will take counter-measures, and the US must bear all consequences,” China’s Ministry of Foreign Affairs said in a statement.
MBS looks East
For Saudi Arabia, courting China is equally important to securing its future as ties with the West, and specifically the United States – the most important alliance of its modern history – become increasingly frayed.
On a landmark visit to Beijing in February of this year, Saudi Arabia’s powerful Crown Prince Mohammed bin Salman pledged tighter economic ties with China, brushing aside the plight of the Uighur Muslims facing suppression and internment over their religious beliefs.
Saudi Aramco in parallel inked a major deal with Chinese companies NORINCO and Panjin Sincen to build an integrated oil refinery and petrochemical complex in the northeastern province of Liaoning as part of a new company, Huajin Aramco Petrochemical Co Ltd.
It also signed an MOU with Zhejiang Petrochemical – one of the key importers of Saudi crude responsible for last month’s bump.
The Saudi state-run behemoth heralded the first deal, valued at $10 billion, as an unprecedented Sino-Foreign joint venture. The Saudis are slated to provide 70% of the 300,000 bpd of crude to a planned refinery and petrochemical complex, expected to commence operations in 2024, according to a press release.
Saudi Aramco CEO Amin Nasser called the deals, “a clear demonstration of Saudi Aramco’s strategy to move from beyond a buyer-seller relationship, to one where we can make significant investments to contribute to China’s economic growth and development.”
“This is the impact of KSA’s shift into downstream business, as Aramco goes public, combined with the effects of US sanctions on Venezuela and Iran,” said the Gulf-based economist.
The kingdom is also likely trying to price out its rival, Iran, and establish a “degree of Chinese dependency” as it braces for a budget shortfall.
Saudi Arabia is expected to see its revenues drop by more than $20 billion next year, its Minister of Finance Mohammed al-Jadaan told reporters on October 31.
That is partly due to lagging oil prices, down to around $60 from over $80 the previous October.
Another major factor is that Saudi Aramco, in an effort to bolster its IPO campaign, is set to reduce its royalty structure, meaning the government will receive less taxes from its goose that lays the golden egg.
