Saudi Arabia’s crude oil shipments to China are set to fall next month as Chinese refiners scale back purchases in response to sluggish domestic demand and high global prices, industry sources have revealed.
According to three traders with direct knowledge of the matter, state-owned giant Saudi Aramco has informed several Chinese buyers that their September crude allocations will be reduced. The cuts are expected to affect both state-run and independent refiners, with some refiners receiving less than 80% of the volumes they requested.
The move reflects a broader slowdown in Chinese oil imports in recent months, as refiners grapple with swelling inventories, weaker-than-expected fuel consumption, and narrowing profit margins. The country’s fragile economic recovery—dragged down by a struggling property sector and subdued manufacturing output—has also weighed on energy demand.
“Refiners are being cautious,” one trader said. “They don’t want to commit to large volumes when the domestic market isn’t strong enough to absorb them.”
While China remains the world’s largest buyer of Saudi crude, competition from discounted Russian oil has intensified since Moscow ramped up exports to Asia following Western sanctions over the war in Ukraine. Russian barrels, sold at a cheaper price, have eaten into Saudi Arabia’s market share.
Saudi Aramco’s decision to reduce September allocations may also be influenced by its ongoing production limits under an OPEC+ agreement, aimed at supporting global prices. Benchmark Brent crude has hovered near $80 per barrel in recent weeks, with analysts predicting that supply discipline from key producers will continue into the final quarter of the year.
Despite the dip, traders say Saudi Arabia is unlikely to risk a major loss of market share in China, with allocations expected to rebound if demand picks up later in the year.
China imported around 1.7 million barrels per day of Saudi crude in the first half of 2025, customs data shows, making the kingdom its second-largest supplier after Russia.