Russia-Saudi Oil War Underway

In a sign of shifting fortunes in the oil business, Trade Arabia reports that Russia has surpassed Saudi Arabia as the top oil exporter to China. Russia beat out Saudi Arabia as China's largest oil supplier in May, customs data showed on Tuesday, marking the third month in a row the world's biggest oil producer has topped the world's biggest oil exporter in feeding China's market. Both Russia and Saudi Arabia view the Asian oil market as a top priority, but China’s small, independent refineries (aka, teapots) prefer the low-Sulphur oil from Russia due to the smaller cargo size and geographical proximity to the refineries.  This is in contrast to high Sulphur grades from Saudi Arabia and Iraq which is less suitable for the teapots because of larger shipment sizes and because they are typically sold under long-term contracts.  China is encouraging the teapot – Russia operation by speeding up approvals for crude import licenses and quotas...(Read Full Post)