Chinese refineries have turned towards raw materials from Brazil

Brazilian oil will replace Saudi oil in the Chinese market, as the Saudis have raised prices for their raw materials.

Chinese refineries, including facilities owned by Sinopec, intend to increase imports of Brazilian oil in the third quarter to partially replace supplies from Saudi Arabia, which were reduced after the kingdom raised prices.

Enterprises from China booked about 1 million b/d of supplies in August and September, several traders reported, as cited by Reuters. Of this volume, 20 million tons will be selected by Unipec, which is higher than the average for the company over the past six months. Over the past 5 months of 2023, Sinopec bought 3.02 million tons of oil.

“Dubai’s medium—quality oil has recently been priced at an unprecedented premium to the light Brent grade,” Goldman Sachs analysts report. And if we add to this the growth of production in Brazil and its desire to increase exports, it is not surprising that Chinese refineries began to choose more from a South American supplier. The reduction of freight on ships also played a role.