Russia is creeping in on one of Saudi Arabia’s biggest oil customers..China
Saudi Arabia has long trumped Russia in the Chinese oil market.
The Saudi share of Chinese crude imports at the beginning of the decade was around 20%, while Russia’s was below 7%, according to data cited by RBC Capital Markets.
But now the Russians are creeping in — and the Saudis are getting nervous.
“Russia is the biggest rival to the Saudis in the single-largest oil demand growth country in the world,” wrote RBC Capital Markets’ commodity strategist Michael Tran.
“The rising tide of Chinese growth has meant that notional volumes for both countries have increased in the years since, but Russia’s gains have been outsized,” he continued.
“The Kingdom now finds itself neck and neck with Moscow for the lead in Chinese market share, with both jostling in the 13-14% range, yet the momentum resides with the latter.”
Notably, the Saudis only managed to increase exports to China by about 120 kb/d over the last five years — a growth rate that was beaten by seven other countries including South Sudan and Colombia, according to figures cited by Tran.
Meanwhile, Russia increased exports by 550 kb/d in the same period.
Moreover, Russia even managed to overtake the Saudis as the biggest crude exporter to China during four months in 2015, continues Tran. Although this detail may not sound particularly impressive, it’s worth pointing out that the Saudis have lost the top spot only six times in the past five years.
Interestingly, part of Russia’s success in China has been attributed to its willingness to accept Chinese yuan denominated currency for their oil. (And not, as others have suggested, due to any sort of allegiance to the Sino-Russo friendship.)
no wonder the sauds dislike the russians so much..
“Russia even managed to overtake the Saudis as the biggest crude exporter to China during four months in 2015″
they dont want to share the pie..
“Russia is the biggest rival to the Saudis in the single-largest oil demand growth country in the world,”