Sources say that the price of Saudi crude in China will surge after a fall in May.

Saudi Arabian crude oil supplies to China are expected to increase in May compared with the previous month, as the sharp price reduction by the Kingdom has attracted increased demand.

A tally of the allocations made to Chinese refiners in May showed that Saudi Aramco, the state oil company, will ship 48 million barrels. This is up from 35.5 million barrels in April.

Aramco has increased its allocation to China for the first time since the start of the year.

Sources said that the Chinese state-owned Sinopec, China National Offshore Oil Corp, and private refiner Shenghong Petrochemical would all be lifting additional Saudi crude in May.

Aramco didn't immediately reply to an email asking for comments on its May allocation.

Aramco reduced the official selling price for May of its flagship Arab Light crude by $2.30, or $1.20 per barrel, above the average prices in Oman and Dubai.

This is the lowest premium in the last four months and the second-lowest in the past four years. The premiums have been reduced following a sudden decision by OPEC+ in May to increase output by 411,000 barrels a day, which was triple the anticipated increase.

Saudi Arabia is China's second-largest crude oil supplier after Russia. Reporting and editing by Jacqueline Wong, Tom Hogue, and Siyi Liu from Singapore

(source: Reuters)