Saudi Arabia regains top ranking in China crude supply

A general view of a crude oil importing port in Qingdao, Shandong province, REUTERS/Stringer

*A general view of a crude oil importing port in Qingdao, Shandong province, REUTERS/Stringer.

21 July 2016, Beijing — Saudi Arabia, the world’s biggest oil exporter, regained its position as China’s top crude supplier in June, after losing out to Russia over the previous three months, customs data showed on Thursday.

China imported 4.569 million tonnes of crude from Saudi Arabia in June, or 1.112 million barrels per day (b/d), down 14.2 percent on the year but beating 961,000 bpd in May.

Saudi imports edged up 0.24 percent in the first six months of the year versus a year ago to an average of 1.06 million b/d.

Russian exports to China have benefited from good demand by independent refiners since late 2015 after the country allowed them to import crude for the first time.

China imported 4.107 million tonnes, or around 999,420 b/d, of crude in June from Russia, down from a record 1.24 million b/d in May.

Russian imports rose 35.3 percent in the first half to 1.05 million b/d, just behind Saudi Arabia.

“Beijing is probably quite pleased with the competition for shares of China’s crude oil market,” said Washington-based China energy expert Erica Downs of the Eurasia Group.

“The government doesn’t want to be too dependent on any one supplier, so competition between major suppliers is a welcome development, especially if it results in lower prices.”

Nicknamed “teapots” due to their relative smaller scale, independents contributed more than half of China’s 930,500 b/d incremental crude buys during the first half. [O/CHINA1]

Stockpiling to boost government reserves was another driver for imports, as new tanks became available.

Imports from Iran rose 16.1 percent in June over a year earlier to 780,175 b/d, up from 671,176 b/d in May. Imports for the January-June period gained 2.5 percent.

Shipments have held relatively steady as Tehran has been focusing on recouping lost markets in Europe after sanctions were lifted, Iranian oil sources say.

Sharp gains in Chinese imports also came from smaller OPEC producer Kuwait as well as Venezuela. Kuwait supplied 45 percent more in June at 1.336 million tonnes, or 325,100 b/d.

Supplies from Venezuela shot up 88 percent in June and for the first six months rose 35.5 percent to 9.936 million tonnes, or 398,500 b/d.

Gasoline Exports at Record High

While China’s total crude imports in June were the lowest on a daily basis since February, at 7.45 million b/d, refined fuel exports were the second-highest on record at 4.22 million tonnes, suggesting a growing fuel surplus.

Thursday’s data showed China’s gasoline exports hit a record high at 1.1 million tonnes in June, more than double a year ago.

Diesel exports gained 64 percent to nearly 1.1 million tonnes, the fourth consecutive month in which they topped one million tonnes.

The National Development & Reform Commission said on Thursday China’s refined fuel consumption rose 4.4 percent in the first half compared to a year ago.

It said gasoline demand gained 13.7 percent while diesel demand fell 3.1 percent during the period. China’s top economic planner did not explain how it had calculated the numbers.

(tonne=7.3 barrels)

*Chen Aizhu; Editing – Ed Davies – Reuters

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