China has accelerated purchases of Saudi crude oil for January to the highest volumes in five months, after the world’s top crude exporter slashed its official selling prices for Asia to the lowest premium over benchmarks in five years.
Chinese refiners have nominated almost 50 million barrels in total of Saudi crude volumes for January loading, anonymous traders with knowledge of the purchases told Bloomberg on Tuesday.
The nominations for January are about 10 million barrels higher compared to the December volumes and the highest level Chinese refiners have booked for one month since August this year, according to Bloomberg’s estimates.
The high volumes are partly due to the lower Saudi official selling prices (OSPs) for Asia for January and partly because of increased nominations from China’s private refiners expecting 2026 quotas for crude imports.
Last week, Saudi Arabia slashed the prices for its crude bound for Asia in January to the lowest premium to benchmarks in five years, as the world’s largest crude exporter looks to preserve market share amid ample supply and falling spot Middle East benchmarks.
Saudi Aramco lowered its prices for Asia-bound crude for its grades by 20-60 cents per barrel compared to December, setting the price of its flagship Arab Light at just $0.60 per barrel premium to Oman/Dubai, the lowest since January 2021.
The Saudi price cut was widely expected by the market and refiners due to plentiful supply as OPEC+ raises output through December, and Saudi Arabia is raising production by the most as its share of the quotas is the biggest.
Saudi and other Middle Eastern crude has also become more popular in Asia now than it was just a month ago after the U.S. sanctions on Russian producers Rosneft and Lukoil sent Indian and some Chinese buyers scrambling for alternative supply until the sanctions situation and implications become clearer.