Saudi Oil Competes with Russia for 5mn bpd Chinese Market

Imports from the Middle East rose for a third straight month in September and could be set for a further boost this month, analyst says

· Middle East imports rise 25.7%: China’s crude oil imports from the Middle East increased 25.7% month-on-month to 13.8 million tonnes in September 2026, marking the third consecutive monthly increase.

· October imports set for further recovery: Imports from the region are projected to exceed 5 million barrels per day (bpd) in October, up from 3.5 million bpd in September and approaching the pre-war level of 5.6 million bpd recorded in February.

· Falling domestic inventories drive demand: China’s onshore crude oil inventories declined by approximately 1.6 million barrels per day in September, the fastest rate on record. The pace of decline slowed to around 400,000 bpd in October.

· Saudi crude becomes more competitive: Saudi Arabia and Iraq have reduced official selling prices for Asian buyers to maintain competitiveness amid rising freight costs caused by shipping disruptions through the Strait of Hormuz and the Red Sea.

· Chinese refiners increase spot purchases: Refiners have actively bid for crude oil from Abu Dhabi and Iraq. Increased availability of Saudi crude in Asia and competitive pricing have also boosted Chinese purchases from Saudi Arabia.

· Saudi oil transportation restored: Saudi Arabia has resumed oil flows through its strategically important East-West pipeline following attacks by Yemen’s Houthi militant group last month.

· Russian crude shipments decline month-on-month: Imports from Russia, China’s largest foreign crude oil supplier, fell 11.4% by volume in September compared with August, contributing to a 2% decline in China’s overall crude oil imports.

· Russian imports remain higher year-on-year: Despite the monthly decline, Russian crude oil imports were 20% higher than in September 2025, marking the third consecutive month of year-on-year growth. The monthly decline was attributed mainly to seasonal maintenance of Russia’s pipeline network.

· Outlook: China’s seaborne crude oil imports are expected to continue recovering as refinery demand strengthens. Future Russian supplies will depend on availability and the price competitiveness of Russian crude.

Effect on Global Oil Markets

China’s renewed demand for Middle Eastern crude, combined with declining domestic inventories, is likely to intensify competition for available supplies. Lower official selling prices by Saudi Arabia and Iraq may help sustain Asian demand, while disruptions to shipping routes and higher freight costs continue to influence sourcing decisions.

[ABS News Service/22.10.2026]

Chinese crude oil imports from the Gulf region are rebounding amid months of disruption from the US-Israel war on Iran and a sharp decline in domestic inventories.

Shipments from the Middle East rose 25.7 per cent month on month to 13.8 million tonnes in September, marking a third consecutive monthly increase, according to Chinese customs data.

Xu Muyu, a senior crude oil analyst at data intelligence firm Kpler, said demand for Middle Eastern crude was likely to remain strong amid record drawdowns, also pointing to renewed interest in Saudi shipments.

“China’s increased buying [of Saudi crude] is mainly driven by a sharp rise in Saudi supplies to Asia and an aggressive pricing strategy that makes Saudi barrels highly competitive in the market,” Xu said.

Chinese refiners had been actively bidding for crude from Abu Dhabi and Iraq through spot tenders, she added.

The country’s imports from the region were on track to exceed 5 million barrels per day in October, Xu said. That would mark a sharp increase from 3.5 million barrels per day in September and approach the pre-Iran war level of 5.6 million barrels per day recorded in February.

Several Middle Eastern producers, including Saudi Arabia and Iraq, have cut the official prices they charge Asian buyers to keep their crude competitive, as shipping disruptions through the Strait of Hormuz and Red Sea have sent freight costs soaring.

Saudi Arabia has also restored oil flows through its critical East-West pipeline following attacks by Yemen’s Houthi militant group last month.

Meanwhile, China’s onshore crude oil inventories fell by about 1.6 million barrels per day in September, the fastest pace on record, Kpler data showed, though the rate of decline had since slowed to about 400,000 barrels per day so far in October.

“China’s seaborne imports have recovered significantly this month,” said Xu, adding that she expected them to keep rising as demand from Chinese refineries increased.

Shipments from Russia, China’s biggest foreign supplier of crude oil, fell 11.4 per cent by volume in September from the previous month, dragging overall imports down 2 per cent, customs data showed.

Xu said the fall in Russian shipments was likely caused by seasonal maintenance on the country’s pipeline network last month, rather than a deliberate decision by Chinese refiners.

“China’s demand for Russian crude remains solid, but future flows will largely depend on supply availability and the economics of Russian barrels,” Xu said.

Despite the monthly decline, China’s crude oil imports from Russia remained 20 per cent higher in September than a year earlier, marking a third consecutive month of year-on-year growth. The increase came even as an earlier buying spree slowed after global energy shocks from the Iran war drove Russian crude prices higher.