Riyadh – Oil prices experienced a slight decline on Tuesday following China’s decision to cut benchmark lending rates, raising concerns about the demand for oil in the world’s largest crude importer.
At 9 a.m. Saudi time, Brent crude dropped by 19 cents to reach $75.90 per barrel. Similarly, US West Texas Intermediate crude fell by 83 cents, settling at $71.10 per barrel.
China recently reduced its one-year loan prime rate and the five-year LPR by 10 basis points each. These rate cuts were implemented after economic data revealed a struggle in sustaining the momentum of China’s retail and factory sectors, which had shown promising growth earlier this year.
Concerns over China’s post-COVID recovery and its impact on economic growth have led to several major banks revising their 2023 growth forecasts for the country.
China’s Crude Imports from Russia Reach Record High of 2.29 Million Barrels Per Day in May
China witnessed a surge in oil imports from Russia, reaching a record high in May. Private refiners in China, seeking sanctioned oil transported through the Eastern Siberia–Pacific Ocean pipeline and discounted Urals crude shipments, played a significant role in this increase.
According to data from the General Administration of Customs, China’s imports from Russia totaled 9.71 million metric tons or 2.29 million barrels per day in May. This figure reflects a 15.3 percent increase from the same period last year, which stood at 1.50 million barrels per day.
May’s import volume marked the highest level on record, showing a significant rise of 32.4 percent compared to April’s figure of 1.73 million barrels per day.
Imports of crude oil from Saudi Arabia totaled 7.32 million tons in May, equivalent to 1.72 million barrels per day. This represents a decrease of 16.0 percent from the previous month’s figure of 2.05 million barrels per day. Saudi Arabia was the largest source of crude oil for China in April.
China’s private refiners, including major players like Hengli Petrochemical, contributed significantly to the rising demand for Russian crude. Hengli’s 400,000 barrels per day refinery in northeast Dalian received its first shipment of Urals crude consisting of 730,000 barrels in early May, along with a total of 3.71 million barrels of ESPO crude throughout the month.
Customs data also indicated that imports from Malaysia in May reached 1.34 million barrels per day, showing a notable increase of 158.6 percent compared to the same period last year. Malaysia often serves as a transit point for sanctioned cargoes from Iran and Venezuela.
Nigeria Urges Quick US Funding for Energy Transition
Nigerian President Bola Tinubu has called on the United States to provide additional funding to accelerate Nigeria’s energy transition plans, emphasizing the need to meet the country’s climate change goals. As Africa’s leading oil producer, Nigeria relies heavily on oil as its main foreign exchange earner and requires it to provide power to millions of citizens still lacking access to electricity.
During a meeting with Geoffrey Praytt, the US Assistant Secretary of State for the Bureau of Energy Resources, President Tinubu stressed the importance of expediting funding to support Nigeria in achieving its energy transition objectives. Tinubu also highlighted the need for prompt assistance and cooperation from the US bureaucracy to address the bottlenecks hindering progress.
“I want to assure you that Nigeria will honor its obligations on climate change and renewables,” President Tinubu affirmed, underscoring Nigeria’s commitment to climate action and renewable energy initiatives.