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Market Chatter: Chinese Refiners Buy Saudi Heavy Crude for 2nd Time in August

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Chinese refiners have purchased heavy crude grades from Saudi Arabia for a second time in August in an indication that crude flows through the vital Strait of Hormuz could remain high, Bloomberg reported Friday.

Chinese energy major PetroChina recently purchased about 4 million barrels of Arab Medium and Heavy crude from Saudi Aramco for September loading, just outside the Strait of Hormuz. This follows another sale by Saudi Aramco to China of sulfur-rich crude for loading off Oman as early as this month, the report said, citing traders familiar with the development.

Chinese refiners are increasingly willing to buy Middle Eastern crude when it can be transferred outside high-risk areas. If sustained, it could revive the traditional Middle East-to-China trade without requiring Chinese vessels to pass through dangerous waterways such as the Strait of Hormuz, the report said, citing Vortexa analyst Emma Li.

Iraq and Qatar are among the other Gulf countries to have increased crude exports, with Chinese refiners buying some of the additional supply. PetroChina bought at least 2 million barrels of Qatari crude offered outside the Strait of Hormuz. China also recently purchased millions of barrels of Iraqi Basrah crude and oil from Abu Dhabi National Oil's latest tender, the report said.

has reached out to PetroChina and Saudi Aramco for comments.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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