RT Jack Prandelli
🇨🇳Sinopec, the biggest Chinese refiner, bought ZERO Saudi crude for a 2nd straight month.
Saudi July allocations to China: 12M barrels, 387k bpd. Record low.
Aramco even cut its July OSP by $6/bbl and buyers still didn't come back, because prices remain far above pre-war levels.
China's May imports hit a DECADE low.
Refiners are cutting runs at a loss.
China spent years buying cheap barrels and filling strategic + commercial tanks.
Now it's living off that stockpile instead of paying war prices.
While the US drains its SPR to supply the world, China drains its reserves to avoid the market entirely.
Same tool, opposite strategy.
Regular readers know the rule flexibility is a stock, not a flow.
China's buyer strike is the hidden force capping this rally but inventories run out.
When Beijing must return to a supply-short market, that re-entry bid is the next leg higher.
The question is when, not if.
💡China's energy administration just met Aramco's downstream chief in Beijing.
Saudi needs its biggest customer back and China needs secure barrels.
Someone blinks first.
China's largest refiner Sinopec bought zero Saudi crude for two consecutive months despite Saudi Arabia cutting July OSP by $6/bbl. China's May imports at decade low as refiners cut runs at a loss. China drawing down strategic and commercial stockpiles built from earlier cheap purchases to avoid current high prices. Analysis suggests when China's inventories deplete and it re-enters the market, oil prices could rally, but timing uncertain. Recent meeting between China's energy administration and Aramco's downstream chief signals potential negotiation.
关键要点
Sinopec purchased zero Saudi crude for second straight month; Saudi July allocations to China at record low 387k bpd
China's May oil imports hit decade low; refiners operating at a loss
China strategically drawing down previously accumulated stockpiles to avoid paying elevated war-time prices
Thesis: China's buyer strike currently capping oil rally, but eventual inventory depletion will force market re-entry and push prices higher
Recent Beijing meeting between China energy officials and Aramco suggests ongoing negotiations
