China: Record oil imports from KSA

Reuters writes: 

"Saudi, however, delivered bigger oil cuts from June and raised crude prices as a plunge in oil prices weighed on the kingdom’s budget.

China, the world’s biggest crude oil importer, took in a record 53.18 million tonnes last month, according to customs data.

China also boosted inflows from Brazil, Norway and Angola, said Emma Li, analyst from Refinitiv. 

Brazil, whose massive offshore projects are coming online, offered Asian refiners competitive deals on relatively high-quality oil just as China and other Asian countries contained the coronavirus and reopened their economies.

Analysts expect China to see another record amount of crude imports in July as some May-loading cargoes are still underway while swelling oil inventory at major Chinese ports slows new arrivals."

   

Saudi Arabia's crownprince's miscalculations

An interesting article by David Hearst about MBS's bad decisions and misperceptions that may lead to an economic downturn of the kindom:

"Both pillars of Mohammed bin Salman’s plan to modernise and reform his country are crumbling. His plan to generate foreign investment by selling off five percent of Aramco on foreign stock exchanges has gone and now PIF, the main vehicle for diversifying his economy away from oil, is in chaos too.  

Many in the region would cheer MBS's demise. He has simply done so much harm to so many people, particularly in Egypt. In a post-oil era, MBS would lose his power of patronage, the power of an oligarch who can spend a billion pounds a minute and not blink.  

But the collapse of Saudi Arabia’s economy, which for decades has been the engine room of the economy of the whole region, would quickly be felt in Egypt, Sudan, Jordan, Lebanon, Syria, Tunisia - all of which send millions of their workers and professionals to the kingdom and whose economies have grown to depend on their remittances."

US pressurizes KSA in petrol price war

Saudi-Arabia opened the floodgates in march inundating the market with cheap petrol. It is a bold move with the aim to get rid of competitors, especially american shale oil producer, even though all stakeholders will bleed severely writes french newspaper Le Monde:

"The Trump administration is stepping up pressure on Riyadh and Prince Mohammed Ben Salman, known as "MBS", to stop increasing production. On Wednesday March 25, in a telephone conversation with the crown prince, US Secretary of State Mike Pompeo urged Riyadh "to rise to the brink of the situation and reassure" the markets.

But for the Saudis, this chaos is the perfect opportunity to get rid of American competitors. The rapid development of shale oil, in Texas in particular, has put the United States back at the center of the game and created an inextricable situation for the kingdom. Since 2014, the increase in American production is such that it always threatens to lower prices."

Saudi Arabias dangerous bet

After an agreement with Russia about the reduction of the oil production failed, KSA took the decision to flood the marked with cheap oil and start a price war.
The plan is to eliminate competitors, especially american shale oil producer. The plan is audacious and dangerous things french specialized blog "Transitions énergies":

"So it all started on March 4. Prince Abdulaziz ben Salman, Saudi Minister of Petroleum, is preparing in his suite at the Park Hyatt hotel what is arguably the most important negotiation of his career. He is experienced in exercise, subtle diplomacy as well as power relations and agreements negotiated in the anterooms. Oil producers are hated rivals and often have conflicting political interests, but they have something in common, their addiction to petrodollars.

But when Prince Abdulaziz meets his Russian counterpart, Alexander Novak, to negotiate a further joint drop in production to limit the fall in prices, the latter does not want to hear about it. And this will lead to one of the biggest earthquakes in the oil market since the shocks of the 1970s. Because Saudi Arabia then decides to launch its plan B, no longer limiting the quantities to keep the prices, but breaking the market to better control it afterwards.

The Kingdom has thus decided to monetize its gigantic reserves as quickly as possible rather than seeking to enhance them over time. It is also an indication that Saudi Arabia believes that the future of oil is bleak over the next few decades due to the energy transition. The world's leading oil exporter therefore deliberately chose to change the situation. He prefers to sell a lot of oil at low prices rather than a little oil at high prices. And can also bet that cheap oil will slow the energy transition. The Kingdom is the third producer (see below) but holds 25% of the world reserves, 70% of the additional production capacities and is by far the first exporter."

Low oil prices get KSA in trouble

Saudi economy meets financial hardship as oil price remains at 60 USD. 
KSA curbs oil extraction to 10 m barrel per day. However US shale oil thwart attempts to increase the oil price through artificial shortage. Minister of Energy
Khalid al-Falih has been fired by MBS.
Media: stock market launch  of oil production company Aramco possibly cancelled.

https://www.bild.de/politik/ausland/politik-ausland/haushaltsloch-in-saudi-arabien-bei-den-oel-scheichs-wird-die-kohle-knapp-64476958.bild.html