US crude flows to China poised to surge
The pace of US crude exports to China is quickening as state-controlled Sinopec begins filling new storage capacity in central China.
At least 12 very large crude carriers (VLCCs) are on subjects to load up to 25.1mn bl, or more than 835,000 b/d, of crude at the US Gulf coast for China in September. That is up from an estimated six tankers expected to load this month with an estimated 12.2mn bl, or almost 400,000 b/d, for the same destination, according to shipping fixture reports compiled by Argus.
Two more VLCCs are on subjects to begin loading at the US Gulf coast in late August for either Singapore or China destinations.
The US exported at least 13.82mn bl, or roughly 445,000 b/d, of crude to China in July, according to preliminary vesseltracking data.
This reflects a roughly 32pc decrease from the 657,000 b/d in June flows to China cited by the US Census Bureau in its latest available monthly statistics. US crude exports to China hit a record-high in May at 1.26mn b/d.
Exports to China were expected to start ramping up at the start of this year after Beijing and Washington signed an interim trade deal that included Chinese commitments to purchase US energy products. But the timeline was delayed by the Covid-19 pandemic, which caused many refiners in Shandong province to slash run rates because of travel restrictions. Fuel demand is now recovering in China.
Sinopec — a key buyer of US crude — has picked up the pace of low-sulphur crude storage injections at a new facility in the central province of Henan to supply its nearby Luoyang refinery.
The facility is part of Sinopec's infrastructure investment program, which includes expanding its Luoyang refinery by 40,000 b/d to 200,000 b/d and connecting the refinery to a 360,000 b/d crude pipeline from Rizhao port in Shandong province. The company is planning to expand Luoyang storage capacity by an additional 5mn bl by mid-2021.
Six of the 18 tankers scheduled to load for China between now and 30 September list Sinopec's trading arm, Unipec, as the charterer.
China's crude import capacity will marginally rise in September with the opening of a new VLCC berth at the Dongjiakou port after a one-month delay, near the major port of Qingdao.
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Iraq to keep 3.3mn b/d crude export cap until year end
Iraq to keep 3.3mn b/d crude export cap until year end
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EU adopts sustainability due diligence rules
EU adopts sustainability due diligence rules
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Libya eyes progress on Eni-led oil and gas project
Libya eyes progress on Eni-led oil and gas project
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