It is not known how much less crude that the Chinese refiners asked for in June. Two of the sources estimated it could be up to 5 million barrels less than May. Saudi Aramco cut its official selling prices for all crude grades to Asia for June-loading cargoes amid lower refining margins. But the price reduction was less than the market expected. The falling profit margins have prompted refiners to seek cheaper oil from other suppliers such as Russia, or even consider lowering operational rates. China is stepping up procurement of discounted Russian oil, with more private mega refineries joining the cargo sweeping, and is taking bigger share of the medium sour Urals market which was dominated by Indian refiners. The overall full supply volumes come even as the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, announced output cuts of 1.16 million barrels per day (bpd) starting from May for the rest of the year.
Saudi Arabia, the world's top oil exporter, will reduce
production by 500,000 bpd under the cuts.
(Reporting by Muyu Xu
Editing by Shri Navaratnam and Christian Schmollinger)
