Russia Becomes Top Oil Supplier To China; Overtakes Saudi; Saudi Slips To Third -- June 25, 2015

A huge "thank you" to a reader for sending me this link.

This is quite an incredible story. Note the third paragraph in the story being reported by Financial Times:

Russia was China’s largest supplier of crude oil for the first time on record in May, as Moscow looks beyond Europe for customers and grows its ties in the east.

The country leapfrogged Saudi Arabia, the world’s largest oil exporter, sending almost 930,000 barrels a day to China, up 21 per cent since April, according to customs data published on Tuesday. 

Saudi Arabia dropped from the top spot to number three, below even Angola, with sales falling to 722,000 b/d, down almost 43 per cent from the month before.

Sino-Russian ties have warmed as sanctions over the conflict in Ukraine have strained Moscow’s relations with the west.

China is adding refining capacity to meet its energy needs and demographic changes are set to propel oil demand in years to come.

Many, many story lines.

The first story line: this was predicted years ago. Over at "Big Stories" I even have "The Global Power Shift: Russian-China Hegemony" or something to that effect.

If you go to that link one will see the last update: China's November (2014) Russian crude imports hit record high. That was six months ago. What a great blog.

But remember, this is not an investment site. Do not make any investment or financial decisions based on what you read here.

The second story line: where is all that Saudi oil going? We're being told that Saudi Arabia is pumping as fast as it can, hitting new records. We are also being told that US shale is displacing Saudi oil from the US market, and now Saudi slips in China. Where is all that Saudi production going? Two answers: a) internal consumption; and, b) displacing other OPEC suppliers from established markets.

The third story line: Saudi slips to third place, below Angola. The US imports about a million bbls of crude oil per day from Saudi Arabia (most recent figures available -- March 15, 2015 data). From Angola the US imports about 150,000 bopd. Saudi has a big American refinery along the US gulf
coast.

The fourth story line: Saudi Arabia is not in competition with the US frackers; they are in competition with their own OPEC partners. Which lead us to ...

... the fifth story line: OPEC is dead. It's every oil sheik and every banana republic dictator for himself.

The sixth story line: Saudi Arabia is in the fight for its life -- ISIS and ISIS-wannabes -- not be confused with Saudi Wahhabis -- are lurking inside and outside the kingdom's borders.

The seventh story line: Saudi's cash flow....

The eighth story line: China's "demographic changes are set to propel oil demand in years to come." I wish I would have said that. LOL.

Not in this story: remember, Saudi Arabia has just "delayed" its $109 billion solar program to provide energy for desalination. It turns out the panels are not yet ready to handle the sandstorms.

Yup, there's a stranger in Saudi's house...

There's A Stranger In My House, Ronnie Milsap