Chinese refiners have reportedly reduced their demand for Saudi Aramco's crude oil in January to the lowest level in five months. The decrease in nominations, from approximately 46 million barrels in December to around 40 million barrels in January, is attributed to higher-than-expected prices, prompting buyers to explore more economical alternatives. While Saudi Aramco has notified some North Asian buyers that it will supply full contractual volumes in January, the reduced nominations reflect a response to the elevated Saudi prices. The adjustment comes despite Saudi Arabia's commitment to maintaining its voluntary crude output cut of 1 million barrels per day into the first quarter of 2024, a decision aimed at supporting oil prices. The discrepancy in pricing between Saudi crude and other similar grades, coupled with a narrower spread between Brent- and Dubai-pegged oil, contributes to the economic viability of alternative supply sources for Asian refiners. However, despite considerations of reducing supply volumes, maintaining good relations with Saudi Arabia remains a priority for refiners due to energy security concerns.

SOURCE:GOOGLE