Saudi Arabia to Increase Crude Oil Supply to China in May Following Price Reduction

Saudi Arabia’s crude oil shipments to China are set to increase significantly in May, following a sharp reduction in prices by the kingdom, sources said on Friday, Reuters reports.

Saudi Aramco, the state-owned oil giant, will supply about 48 million barrels of crude to China in May, a notable increase from the 35.5 million barrels scheduled for April.

This marks the highest allocation since at least 2024 and represents the first increase in Saudi oil shipments to China since the start of the year, according to Reuters data. Key Chinese refiners such as Sinopec, China National Offshore Oil Corporation (CNOOC), and private refiner Shenghong Petrochemical will all be receiving more Saudi crude in May.

The rise in supply comes after a decision by Saudi Aramco to cut the official selling price (OSP) for its Arab Light crude by $2.30 per barrel to $1.20 above the average of Oman and Dubai prices. This price adjustment, which brings the premium to a four-month low, has been seen as a move to boost demand, particularly in Asia.

The increased shipments align with broader market expectations, driven by a decision by OPEC+—a group of oil-producing nations that controls more than 40% of global oil output—to raise production by 411,000 barrels per day in May, significantly higher than earlier forecasts. These supply changes come amid concerns about the ongoing trade tensions between the US and China, which have contributed to a four-year low in global oil prices.

Analysts suggest that the reduction in prices and the boost in supply could help stabilize oil prices, particularly in light of potential supply disruptions from countries like Venezuela and Iran due to sanctions. Despite these fluctuations, Saudi Arabia remains the second-largest crude oil supplier to China, after Russia.

In the first two months of 2025, China imported 84.3 million barrels of crude from Saudi Arabia, a decrease of 13% compared to the same period in 2024, according to Chinese customs data.