If you want to know where the long-term future of oil demand lies, take a look at what Saudi Aramco has been doing lately.
Earlier this year, the world’s biggest oil company bought a stake in independent Chinese refiner Rongsheng Petrochemical Co. in exchange for supplying it with 480,000 barrels a day of crude for 20 years.
In recent weeks, it also signed agreements with a pair of smaller processors to embark on similar deals, each time exploring a 10% equity stake and an agreement to provide crude for the plants to process.
Those are long-term shows of faith in Chinese oil consumption, though they also come as the kingdom’s customers in Europe and the US balk at higher prices.
Two weeks ago, Saudi Arabia sent just 67,000 barrels a day of crude to America, the second-lowest volume on record in data going back to 2010. The lowest was this past June. Meanwhile, record prices have some European refiners asking for less crude than usual in their long-term contracts.
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