Jake Fox
Crude oil’s upside was capped, and the phrase “saudi arabia sells us treasury bonds” misstates this report: Saudi Arabia sold almost 100 million barrels of crude to Asian buyers through the Strait of Hormuz. The shipments are helping keep oil moving while the Kingdom’s East West pipeline recovers, though no specific oil price or USO price data was supplied.
At a Glance
- Almost 100 million barrels were sold for October and November delivery.
- Buyers include refiners in China, India, South Korea and Japan.
- Saudi Arabia is arranging transport through the Strait of Hormuz.
- The East West pipeline has resumed partial operations, while a full restart could take weeks.
Why Saudi Arabia’s reported sales are crude, not US Treasury bonds
The sales reported this week concern oil exports, not government debt. The crude volume is roughly equal to one day of total global oil demand, and the cargoes are bound for Asian refiners. Buyers include Chinese state owned refineries and smaller independent processors, as well as facilities in India, South Korea and Japan.
Saudi Aramco is offering to organize shipping to Asia. That arrangement matters because the East West pipeline, built to carry crude toward the Red Sea while avoiding Hormuz, was out of service. With that route disrupted, Saudi shipments through the strait have risen, more than doubling recent flows on that route according to estimates cited in the reporting.
Pipeline recovery leaves Hormuz vital to Asian supply
Saudi Arabia has offered crude from Ras Tanura for loading through ship to ship transfers at Sohar, Oman, just outside the Strait of Hormuz. The Kingdom also increased shuttle shipping in the area, preserving a route to Asian customers while Red Sea exports recover.
Partial operations on the East West pipeline resumed this week. Restoring its full flow, about 4 million barrels per day, is expected to take weeks. Until then, the extra Hormuz shipments can help offset concerns about falling supply and temper sharp oil price increases.
The supplied market data contains no direct oil quotation or USO price reading, so a specific price move cannot be quantified here. The reported effect is qualitative: increased Saudi exports through Hormuz have limited the upside in oil prices despite the pipeline outage.
Frequently Asked Questions
Does china own us treasury bonds?
Yes. China has held US Treasury securities. This oil report does not give a current holding total.
Is china buying us treasury bonds?
The supplied report does not say whether China is currently buying US Treasury bonds. It describes Chinese refiners purchasing Saudi crude.
Why does the us treasury sell bonds?
The US Treasury sells bonds to borrow money for federal government financing needs.
Why does japan buy us treasury bonds?
Japan holds US Treasury securities as part of its financial and reserve assets. This report gives no details about Japanese purchases.
Can foreigners buy us treasury bonds?
Yes. Foreign investors can buy US Treasury securities through eligible financial institutions and other available channels.
Holly Herrera
James Stephens