Saudi Arabia’s crude oil shipments to China are expected to remain at a record low in July, according to sources familiar with the matter. This sustained decline follows a period of elevated oil prices triggered by the ongoing conflict involving the United States, Israel, and Iran, which has dampened demand from China, the world’s largest crude importer.

Market observers closely monitor Saudi Arabia’s allocations to China as an indicator of Chinese refinery activity and overall crude demand. The reduced supply reflects cautious buying behavior among Chinese refiners, who are limiting imports of higher-priced crude amid production cutbacks and increased reliance on domestic oil inventories.

The geopolitical tensions in the Middle East have also affected physical supply routes. Iran’s closure of the Strait of Hormuz has partially constrained Saudi Arabia’s crude exports via the Gulf. In response, Saudi Aramco has rerouted significant volumes through its Red Sea Yanbu terminal to maintain export levels.

For July, Saudi Aramco is scheduled to load approximately 12 million barrels of oil for shipment to China, representing an average of about 387,000 barrels per day. The sources, who spoke on condition of anonymity as they were not authorised to discuss the information publicly, indicated that this allocation continues the trend of reduced shipments seen in recent months.

This situation underscores the broader market impact of geopolitical instability and shifting demand patterns in Asia’s key energy markets. While refiners in China adjust to elevated prices and logistical challenges, Saudi Arabia seeks alternative routes to sustain its export commitments amidst ongoing regional tensions.