Saudi Aramco intensifying efforts to expand into China downstream oil operations
- August 23, 2023
- Posted by: Quatro Strategies
- Categories: China, Middle East, Oil & Gas
Saudi Aramco, the world’s largest oil company, is intensifying its efforts to expand its presence in China’s downstream oil sector, targeting the robust recovery in oil product demand in the country. Mohammed Al Qahtani, the company’s Downstream President, emphasized the strategic importance of China to Aramco’s business growth, not only in Asia but worldwide. Al Qahtani stressed that Aramco aims to remain a dependable source of long-term oil supply for China.
China’s oil demand has been a driving force in the global oil market, with many analysts predicting that a substantial portion of this year’s oil demand growth could originate from China alone. The International Energy Agency (IEA) and other industry forecasters estimate that around 70% of the global oil demand increase in 2023 could come from China.
Saudi Aramco has been actively expanding its downstream business in China in recent times. The company recently completed the acquisition of a 10% stake in Rongsheng Petrochemical Co Ltd for $3.4 billion. This move not only deepens Aramco’s foothold in China’s petrochemical sector but also aligns with the company’s strategy to secure a larger share of China’s oil market.
Earlier in the year, Saudi Aramco announced significant refinery and petrochemical deals in China. One of these deals involves a joint venture with Chinese partners to construct a $10-billion refining and petrochemical complex within the next three years. This venture will not only help Aramco gain a stronger presence in China’s downstream market but also provide an additional export outlet for Saudi crude oil in China.
Moreover, as part of its expanding downstream strategy, Aramco completed its acquisition of a 10% interest in Rongsheng Petrochemical, a move that solidifies the company’s presence in the Chinese downstream sector. Under a long-term sales agreement, Aramco will also supply 480,000 barrels per day of Arabian crude oil to Zhejiang Petroleum and Chemical Co. Ltd (ZPC), an affiliate of Rongsheng Petrochemical.
Overall, Aramco’s increased focus on China’s downstream market reflects its anticipation of sustained growth in oil demand from the country and its intention to secure a prominent position within China’s evolving energy landscape.
Interested in learning more?
Sign up for Top Insights Today
Top Insights Today delivers the latest insights straight to your inbox.
You will get daily industry insights on
Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.
Read more insights
China-Russia trade slips in 2025 as autos slump and oil-price effects bite
China’s trade with Russia cooled in 2025 after four straight years of expansion, marking the first annual pullback since the COVID-disrupted year of 2020.
Chinese customs data show two-way trade totaled 1.63 trillion yuan (about $234 billion), down 6.5% from the 2024 record, with Chinese exports to Russia falling 9.9% and imports from Russia slipping 3.4%. In dollar terms, the bilateral trade value was reported at $228.1 billion, down 6.9% year-on-year.
Hormuz risk reopens Europe’s post-Russia energy vulnerability
The military confrontation in Iran creates immediate and potentially sustained economic disruptions for European economies that have only recently stabilized following the traumatic energy crisis triggered by Russia’s invasion of Ukraine.
The vulnerability of critical maritime chokepoints through which substantial portions of Europe’s fuel supplies transit, combined with the continent’s modest growth prospects and delicate inflation dynamics, means that even temporary supply disruptions carry disproportionate consequences for economic performance and complicate central bank policy formulation at a moment when monetary authorities had hoped to navigate toward normalization.
China’s slowing economy strains European luxury and automotive sectors
European companies are increasingly feeling the strain from China’s economic slowdown, with luxury brands and car manufacturers among the most impacted. Major names like Hugo Boss, Burberry Group, Daimler Truck, and LVMH have all reported declines in sales due to cautious consumer spending in China. LVMH, for instance…