Saudi Crude Exports to China Expected to Surge in October

Saudi Arabia is set to significantly increase its crude oil exports to China in October, with shipments expected to reach 51 million barrels, or 1.65 million barrels per day, matching the highest volume since April 2023. This rise follows a deep price cut by Saudi Aramco for its flagship Arab Light crude to Asia, reducing the premium by $1 per barrel, as part of a strategy to reclaim market share in Asia amid OPEC+ production increases. Concurrently, Saudi Arabia is releasing an additional 500,000 barrels per day into the global market due to rising production and a sharp decline in domestic oil consumption as cooler temperatures reduce the need for oil-fired electricity. The kingdom’s new natural gas project also contributes to freeing up more oil for export by decreasing local oil demand. Despite increased supply, global oil demand is expected to peak and then modestly decline in the coming months, raising concerns of a potential market surplus and downward pressure on prices. Analysts from UBS and Goldman Sachs forecast further price drops, with the International Energy Agency projecting a record surplus in 2026 based on current supply trends.