Saudi Energy Minister Prince Abdulaziz bin Salman and Zhang Jianhua, China’s National Energy Administrator, have stressed the importance of “long-term” and “reliable” crude oil supplies during a phone call.
Both officials confirmed their willingness to work together to support the stability of international oil markets, the Saudi Press Agency reported on Friday.
China, the world’s largest crude oil importer and second-largest economy globally, has been buying discounted crude oil from Russia since the Ukraine war began.
Analysts have said that Beijing would be less inclined to increase its energy reliance on Moscow, with an EU embargo on Russian oil set to come into effect on December 5.
“While Russian crude trades at a discount to market prices, exports to China and India have not increased further,” said UBS strategists in a report earlier this week.
“We believe China may be aiming to avoid making Europe’s mistake of becoming too dependent on one country, preferring to keep the maximum share of one exporter at 20 per cent.”
Coronavirus-related mobility restrictions have limited oil demand growth in China.
Since 2020, Beijing has pursued a zero-Covid policy that calls for complete lockdowns, even in the case of minor outbreaks.
Frequent lockdowns have affected China’s large manufacturing sector and disrupted global supply chains.
Oil markets have been tight after the Opec+ alliance of oil-producing countries slashed its output by 2 million barrels per day on expectations of an economic slowdown.
Crude production in Saudi Arabia, the world’s largest oil exporter, increased by 236,000 bpd to 11.05 million bpd in August, while its exports in the month surged to a more than two-year high of 7.6 million bpd, according to data from the Joint Organisations Data Initiative.
Discussions between Prince Abdulaziz and Mr Zhang included “co-operation and joint investments along the Belt and Road countries, as well as investments in integrated refining and petrochemical complexes”, SPA reported.
Both officials also stressed the importance of co-operating in the fields of electricity, renewables and clean hydrogen.
China was the top trading partner of Saudi Arabia in the second quarter of 2022, with exports amounting to 63.4 billion riyals ($16.9bn). India and Japan followed next with exports of 43.5bn riyals and 39.1bn riyals, respectively.
Meanwhile, Saudi imports from China amounted to 34bn riyals in the second quarter, making it the top source of imports into the kingdom.
China was followed by the US and the UAE, with imports of 15.4bn riyals and 11.2bn riyals, respectively.