Saudi crude supply to China to hit record low in May, sources say

Saudi Arabia's crude oil sales to China are set to fall to a record low in May as the U.S.-Iran conflict drives up prices and disrupts shipping, people familiar with the situation said.

Saudi Aramco 2222.SE is set to ship about 20 million barrels of oil to its customers in China for May, or about 645,161 barrels per day (bpd), they said.

That would mark the lowest level on record and less than half of the roughly 45 million barrels the Kingdom shipped to China each month in January and February, based on Kpler and Reuters data.

Major Chinese refiners Sinopec 600028.SS and Rongsheng Petrochemical 002493.SZ have sharply reduced their lifting for May, according to the sources, who were not authorized to speak to the media.

Sinopec nominated less volume loading in May as it expects to receive some of the cargoes that had been scheduled to load in April, one of the sources said.

Saudi Aramco declined to comment on its May allocation, while Sinopec and Rongsheng did not immediately respond to requests for comments.

RECORD PRICES DAMPEN DEMAND

Last week, Saudi set the official selling price of May Arab Light crude oil to Asia at a record premium of $19.50 a barrel above the Oman/Dubai average, an increase of $17 from the previous month.

The elevated prices led some refiners to lift less, one of the sources said, adding that the May liftings were for Yanbu port.

Saudi has been rerouting its oil exports to the Red Sea port of Yanbu via the East-West Pipeline since the war broke out, although it asked clients to submit loading programmed for Yanbu and Ras Tanura for May in preparation for the reopening of the Strait of Hormuz.

Attacks last week had cut Saudi's oil production capacity by around 600,000 barrels per ​day and throughput on its East-West Pipeline by about 700,000 bpd.

It said on Sunday that it has restored full oil pumping capacity through the East-West pipeline to about seven million barrels per day.

-Reporting by Siyi Liu, Florence Tan in Singapore and Gnaneshwar Rajan in BengaluruEditing by David Goodman and Janane Venkatraman/Reuters