ASHARQ AL-AWSAT - SEPTEMBER 1, 2016
There is no doubt that the Chinese oil market has become more competitive this year and based on the Chinese government’s statistics, Saudi Arabia holds the largest share in the Chinese market, however the amount of oil imports from Saudi Arabia decreased this year. Chinese customs revealed that all Chinese revenues had increased during the first seven months of the year, while revenues from Saudi Arabia and South Sudan had decreased. During the first seven months of this year, China imported about 30.5 million metric tons of Saudi oil, a 0.4% decrease than that of last year. Whereas, China imported about 29.5 million metric tons of Russian oil with 27% increase than last year. Amid this fierce competition, it is important for Saudi Arabia to fortify its oil position in China with more political and strategic support. Granting discounts on oil prices won’t be helpful at this point, especially that Saudi Arabia sets its prices before all OPEC countries in the Gulf. So it has become crucial to create new methods to keep Saudi Arabia’s position in the Chinese market. On Tuesday, Saudi Arabia and Chinese governments signed 15 memorandums of understanding (MoU) among which one in the energy sector and another in storing crude oil. Oil storage MoU is the most prominent given that Saudi Arabia had never stored oil in China before. Saudi Arabia currently owns three storage sites: Okinawa in Japan, Sidi Krir in Egypt, and Rotterdam in Holland. Saudi Arabia used to have another storage site in the Bahamas, but that was closed seven or eight years ago.