Saudi crude shipments to China are projected to plunge to about 10 million barrels in June, roughly an 80% fall from a March peak, according to a market projection by DailyAlpha. Traders say volumes for May have already been halved to around 20 million barrels, down from roughly 40-45 million in April and earlier this year. The pullback reflects a record-high official selling price for Asian deliveries from Saudi Aramco and shipping constraints that have forced more cargoes through the smaller Red Sea port of Yanbu. The near-term outcome will hinge on Aramco’s next monthly pricing decision and whether regional export routes remain secure.

Three trading-source reports, speaking to industry allocations and shipment plans, say Saudi Aramco cut the crude volumes it allocated to Chinese buyers for May to roughly 20 million barrels. That's a sharp step down from allocations of about 40 million barrels in April and about 45 million barrels in January-February 2026. Traders say those May allocations are being loaded largely via Yanbu on the Red Sea rather than through Saudi Gulf terminals, because of disruptions tied to the Iran conflict and constraints on passage through the Strait of Hormuz.

Price shock, inventories and buyer response

Market reports put the May official selling price premium for Arab Light at about US$19.50 a barrel above the Oman/Dubai average. Several trading and market commentaries link that high premium to immediate reductions in Chinese liftings. Refiners in China responded by cutting nominated volumes for May, drawing on inventories and buying cheaper alternative barrels, such as discounted Russian grades.

Major Chinese refiners named in the coverage include Sinopec and Rongsheng Petrochemical, both reported to have trimmed their May nominations. Market commentary suggests China’s large crude stocks have given refiners the flexibility to defer purchases while they run down inventories and source cheaper crude. The inventory argument and its role in allowing deferred purchases is set out in the DailyAlpha projection that also calculates a potential June allocation near 10 million barrels.

That behaviour is straightforward economics. Higher delivered price at the pump prompts refiners to slow purchases, if they can. The price move here was unusually large when compared with typical monthly shifts, and the effect shows up quickly in nominated liftings and the mix of origin barrels Chinese buyers choose to cover crude runs.

Shipping bottlenecks and security risks

Physical constraints are magnifying the pricing effect. Multiple trading reports say Saudi shipments intended for Asia have been redirected through the East-West Pipeline to Yanbu after Gulf export terminals were disrupted.

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That routing creates a bottleneck because Yanbu’s export capacity is smaller than pre-conflict throughput via Gulf terminals.

The reporting contains some divergence about exact capacities. One account cites Yanbu export capacity around 5 million barrels per day. Other reporting points to restored East-West Pipeline pumping near seven million barrels per day and to Saudi shipments of up to 7 million bpd via Yanbu after Ras Tanura was shut. Those differences reflect the fluid situation on the ground and how companies report throughput during restorations and temporary reroutes.

Attacks and shutdowns earlier in the conflict reduced Saudi production and pipeline throughput by several hundred thousand barrels per day before some flows were restored, according to industry accounts. Traders also warn of an additional risk. Analysts cited in reporting say a Houthi threat to the Bab el-Mandeb Strait could cut off the Red Sea export route and further complicate flows to Asia, which might force even larger diversions or deeper cuts in shipments.

Taken together, the price-setting by Aramco and the narrower physical export window through Yanbu explain why Chinese liftings have fallen so quickly. Higher premiums make Aramco barrels less attractive when buyers can draw on inventories or tap discounted alternatives. At the same time, loading constraints at smaller Red Sea ports lower the practical ceiling for how much Saudi crude can reach Chinese refineries in a given month.

It is important to note where the reports diverge. The sharp June projection of about 10 million barrels is reported only by DailyAlpha, and its inventory estimate underpins that specific projection.

Other pieces in the market reporting bundle don't confirm the precise June figure, and they vary on throughput numbers for Yanbu and the East-West Pipeline. Still, the direction of change is consistent across traders: volumes to China are down markedly from the highs earlier this year.

For buyers and refiners, the immediate consequences are about feedstock security and margins. Refiners that can run down inventories without immediate purchases gain negotiating leverage. Those that must refill quickly are likely to pay up or switch grades. For sellers, Aramco faces a trade-off between holding prices firm and preserving market share in Asia.

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At the centre of the next move is Aramco’s monthly official selling price. DailyAlpha’s projection puts the June China allocation at about 10 million barrels unless Aramco cuts prices or shipping access improves. That pricing decision will determine whether Chinese liftings stay depressed or recover some of the volumes seen earlier in 2026.

This article was created with AI assistance.