Saudi Arabia and Angola both beat out Russia as the largest crude oil suppliers to China in October, Bloomberg reported Monday. The huge China market is one arena where the world’s suppliers continue to compete for share amid a global oil glut, and energy experts continue to worry that high production levels will not change anytime soon.
“Saudi Arabia never stopped fighting for market share in China and in Asia as a whole,” Gao Jian, an analyst at SCI International, an energy consultant, told Bloomberg. “One year after OPEC announced its production policy to defend market share, their strategy seems to be working.”
China is a key market for members of the Organization of the Petroleum Exporting Countries that are trying to sell crude oil during a market glut, with American shale oil on the market as one factor. Saudi Arabia sold 3.99 million metric tons to China during October, according to data from China’s General Administration of Customs. Angola sold 3.64 million tons to China, while Russia was third, selling 3.41 million tons during the month.
Russia’s economy has been badly hit by the slump in global energy prices as well as the economic sanctions levied by Western nations following the annexation of Crimea from Ukraine in March 2014.
Global oil prices have fallen by 40 percent since last November as OPEC members prepare to meet next week in Vienna to discuss market conditions. Venezuela, which is almost totally dependent on oil revenue, has said crude prices could drop as low as the mid-$20 range per barrel unless the member states work to bring stability to the market.
Experts expect OPEC to maintain its current policy at the Dec. 4 meeting with sustained high output, despite low prices, as states try to defend their market shares, the Wall Street Journal reported.
“At 487.3 million barrels, U.S. crude oil inventories remain near levels not seen for this time of the year in at least the last 80 years,” said a report from the U.S. Energy Department.
With Iranian oil set to return to the market in coming months, experts fear supply will continue to expand, further lowering prices.