Saudi Arabia has decreased its crude oil shipments to the US since 1945, ensuring the most important strategic relationship for the Saudi Kingdom in its short history. But over the past year, Saudi crude exporters to the US feel from 687,946 bpd in August to 262,053 bpd in July (2019), a one year drop of 62%. The Saudis seem to be filling a gap left by Iran, which is exporting much less oil to China now. US sanctions on Iranian oil have, according to CNBC in an article attributed to Natasha Turk, have helped the shift. Saudi Arabia is looking more to export to Asia, while the US trades with the US depending on its internal needs.
The US is now more self-reliant than ever, thanks to its own shale oil revolution, which ensured that the US will become the largest oil producer on the planet by the end of 2019. The Saudi Kingdom learned from the production cuts in 2017 that they had more success by cutting their flows to the largest, most transparent and most timely market – the US.
OPEC and its allies orchestrated to put a floor under falling oil prices via coordinated production. Although the US and Middle East are transparent with data, China is not and the market traded mostly on US numbers but now the there is global data supported by satellites – crude oil shipments and stocks can be monitored from far above in the sky.
China has been called the black hole of oil consumption and are now called “savvy and astute buyers” while they have launched two new refineries which will grow its refining capacity by 800,000 bpd. According to reports Saudi Arabia now has a long-game in Asia and is actively exporting crude to India and China. Saudi`s Armco plans to take a stake in an India refining and petrochemical giant – 20% of it – underscores its commitment to Asia.