Fading Chinese buying curbs WAF crude flows to Asia
Flows of west African crude to Asia-Pacific fell by 200,000 b/d in December, as fading Chinese demand offset buying hikes in India and elsewhere.
West African crude exports to Asia-Pacific dropped to 2.03mn b/d last month from 2.23mn b/d in November (see graph). Chinese refiners loaded less than 1mn b/d — the lowest tally since May 2018 — after booking 1.26mn b/d and 1.3mn b/d for the two preceding months. Chinese demand for west African crude progressively waned in the fourth quarter as cargo prices rose against benchmark North Sea Dated and tougher Covid-19 restrictions in Europe left an overhang of alternatives in the Atlantic basin.
A hike in Indian buying only partially offset the drop to China. Indian refiner IOC issued a series of tenders in the fourth quarter to buy December and January-loading cargoes. Indian refiners collectively took 525,000 b/d of December supplies, a five-month high and almost 65,000 b/d more than in November. India's purchases could have been higher had it not been for ExxonMobil declaring force majeure on exports of Nigerian light sweet Qua Iboe in mid-December, after a gas explosion at the loading terminal halted production.
The stream was meant to restart early this month, although lifters had not received updates on any potential resumption by 7 January. Nearly 185,000 b/d of Qua Iboe was scheduled to load last month, but only 60,000 b/d sailed, split evenly between Turkey and South Africa. Indian refiners took roughly 90,000 b/d of the grade in November.
Problems at the Brass terminal further hindered Nigerian crude loadings in December. Italy's Eni, the terminal operator, declared force majeure on exports of Brass crude on 24 November after a pipeline explosion affected at least 30,000 b/d of flows. Loadings of the light sweet grade — which is often popular with Indian refiners — are still only 60,000 b/d now, well down on the terminal's capacity of around 100,000 b/d.
Japan returned to load west African crude in December after a three-month hiatus. Refiner JXTG booked a cargo each of medium sweet Congolese Djeno and Angolan Sangos crudes for its 235,000 b/d Kawasaki refinery. Both cargoes loaded on the Landbridge Horizon, a very large crude carrier.
Exports to some smaller regional markets rose in December. Thailand's PTT boosted its December loadings by over 30,000 b/d to a five-month high of more than 150,000 b/d, while exports to Singapore were 130,000 b/d, the highest tally since September. But flows to Malaysia — like Singapore another storage and blending hub — fell to one cargo of Gabonese Rabi Blend, leaving them around a fifth of the 156,000 b/d reached in November, an eight-month high.
Taiwanese refiner CPC booked just over 125,000 b/d of the December programme, almost unchanged on the month, while Indonesia's Pertamina took a cargo of Nigerian Bonny Light, after loading no west African crude in November. Indonesia has notably steered clear of taking west African crude over the last year, in particular Nigerian streams. Loadings were just 45,000 b/d last year, less than half the 100,000 b/d that it took in 2019.
ExxonMobil did not ship any cargoes of west African crude to its 90,000 b/d Altona refinery in Australia, for the first time since August. But this may change over the first quarter of 2021, following the government's relaxation of Covid-19 restrictions in December. ExxonMobil usually takes Nigerian light sweet Yoho, as well as Rabi Blend and its Gabonese stablemate, medium sweet Etame. No west African crude loaded to go to Brunei, South Korea or Vietnam in December.
| WAF crude to Asia-Pacific Dec 20 | '000 b/d | |||
| Angola | Nigeria | Others | Total | |
| China | 709 | 275 | 984 | |
| India | 61 | 379 | 84 | 524 |
| Singapore | 31 | 16 | 82 | 129 |
| Indonesia | 32 | 32 | ||
| Thailand | 63 | 60 | 31 | 154 |
| Malaysia | 27 | 27 | ||
| South Korea | 0 | 0 | ||
| Australia | 0 | 0 | ||
| Japan | 31 | 30 | 61 | |
| Taiwan | 63 | 32 | 31 | 126 |
| Brunei | 0 | 0 | ||
| Myanmar | 0 | 0 | ||
| Vietnam | 0 | 0 | ||
| Total | 958 | 519 | 560 | 2,037 |
Related news posts
India's crude output steady, throughput rises in March
India's crude output steady, throughput rises in March
Mumbai, 26 April (Argus) — India's March crude production was steady on the year and up by 2pc on the month at 543,000 b/d. Output fell by 2pc to 546,000 b/d during the April 2023-March 2024 fiscal year. Total crude and condensate production was 590,000 b/d in March, up from 580,000 b/d in February and steady from March 2023, data from the oil ministry show. Crude output from state-controlled upstream firm ONGC was 354,000 b/d in March, up by 0.2pc on the month and down by 6pc on the year. This was likely because of a shutdown at the Panna-Mukta offshore platforms to commission a new crude pipeline and to modernise its evacuation facilities. The windfall tax for domestic crude production was raised to 4,600 rupees/t ($7.58/bl) during 1-15 March and then to Rs4,900/t during 16 March-3 April. The rate is reviewed every two weeks. The Indian government first imposed the windfall tax in July 2022 as a sharp increase in crude prices then resulted in domestic crude producers making windfall gains. Indian crude producers sell crude to domestic refineries at international parity prices. ONGC and fellow state-controlled upstream firm Oil India continued to produce the most of India's crude in March at 425,000 b/d, making up 78pc of the total production. Private-sector producers and joint ventures made up the remainder. India's dependence on crude imports declined to 88pc in March from 89pc in February and March 2023. Its dependence on crude imports rose to around 88pc in April 2023-March 2024 from 87pc in the previous year. India has steadily been trying to reduce its dependence on imports. It extended the deadline to 15 May for submitting bids for 28 upstream oil and gas blocks in the ninth Open Acreage Licensing Program bidding round. India's oil product exports fell to 5.3mn t in March from 6mn t in March 2023, but rose from 4.1mn t in February. Higher throughput Indian refiners processed 5.53mn b/d in March, higher from 5.28mn b/d in February and 5.44mn b/d in March 2023. Processing rose to 5.24mn b/d in April 2023-March 2024, up from 5.11mn b/d the previous year. Processing likely picked up as product demand increased in March. India's product demand — including diesel, gasoline, jet fuel, LPG, bitumen, naphtha and petroleum coke — increased by nearly 7pc from the previous month and was steady on the year to 21mn t in March. Crude throughput at state-controlled IOC's nine refineries was 1.6mn b/d, up by 8pc from a year earlier and by 10pc against the previous month. State-controlled BPCL processed 874,000 b/d at its refineries in March, up by 3pc from a year earlier and by 8pc from February. State-controlled HPCL's throughput rose by 3pc from the previous year and was steady from a month earlier at 709,000 b/d. ONGC's refineries processed 354,000 b/d in March, 6pc lower on the month and steady against a year earlier. India imported 4.7mn b/d of crude in March, 4pc lower from the previous year and up by 4pc from a month earlier, according to oil ministry data. By Roshni Devi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US reimposes Venezuela oil sanctions
US reimposes Venezuela oil sanctions
The US' decision reopens the door for Chinese independent refiners to procure Venezuelan Merey at wide discounts to other crude grades, writes Haik Gugarats Washington, 25 April (Argus) — The US administration reimposed sanctions targeting Venezuela's oil exports and energy sector investments on 17 April, and set a deadline of 31 May for most foreign companies to wind down business with state-owned oil firm PdV. The decision rescinds a sanctions waiver issued in October, which allowed Venezuela to sell oil freely to any buyer and to invite foreign investment in the country's energy sector. The waiver was due to expire on 18 April, with an extension dependent on Caracas upholding a pledge to hold free and fair elections. Venezuelan president Nicolas Maduro's government reneged on that deal by refusing to register leading opposition candidate Maria Corina Machado or an alternative candidate designated by her, a senior US official says. The US considered the potential effects on global energy markets and other factors in its decision but "fundamentally the decision was based on the actions and non-actions of the Venezuelan authorities", the official says. China's imports of Venezuelan Merey — often labelled as diluted bitumen — decreased following the instigation of the waiver in October. Independent refiners in Shandong previously benefited from wide discounts on the sanctioned crude, but they drastically cut back their Merey imports as prices rose. Meanwhile, state-controlled PetroChina was able to resume imports under the waiver. The reimposition of sanctions this month was widely expected and Merey's discount to Ice Brent began to widen in early April, before the decision was announced. Merey's discount to Brent averaged $9/bl in March, but had reached $12/bl by the start of April and $13/bl after the reimposition of sanctions was formally announced. Buyers are expecting final deals for May at discounts of $14/bl or lower, and for prices to drop by a further $3-4/bl in the short term. Longer-term prices for Merey will be influenced by supply and prices for Iranian crude — another mainstay of Shandong independents. Venezuela's crude output reached 850,000 b/d in March, up by 150,000 b/d on the year, according to Argus estimates. PdV has begun looking to change the terms of its nine active joint ventures with international oil companies, in an effort to keep production elevated now sanctions are back in place. Chasing the deadline The end of the waiver will affect Venezuela's exports to India as much as those to China. India emerged as a major destination for Venezuelan crude after sanctions were lifted, importing 152,000 b/d in March. Two more Venezuelan cargoes are expected to arrive in India before the 31 May deadline. The 2mn bl Caspar left Venezuela's Jose port on 14 March and is expected to arrive in India on 26 April, and Suezmax vessel Tinos is due at India's Sikka port on 30 April. Separate sanctions waivers granted to Chevron and oil field service companies Halliburton, SLB, Baker Hughes and Weatherford will remain in place. Chevron can continue lifting oil from its joint venture with PdV, solely for imports to the US. Oil-for-debt deals between PdV and Spain's Repsol and Italy's Eni are expected to be allowed to continue. Repsol imported 23,000 b/d of Venezuelan crude into Spain last year and 29,000 b/d so far this year, according to data from oil analytics firm Vortexa. And a waiver enabling a Shell project to import natural gas from Venezuela's Dragon field to Trinidad and Tobago is expected to remain in place. The US says it would consider other requests for sanctions waivers for specific energy projects. It will consider lifting sanctions again if Maduro's government allows opposition candidates to participate in the July presidential election. The resumption of sanctions "should not be viewed as a final decision that we no longer believe Venezuela can hold competitive and inclusive elections", a US official says. Chinese imports of Venezuelan crude Venezuelan crude exports Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LNG Energy eyes sanctions-hit Venezuela oil blocks
LNG Energy eyes sanctions-hit Venezuela oil blocks
Caracas, 25 April (Argus) — A Canadian firm plans to revive two onshore oil blocks in Venezuela, but the conditional deals signed with struggling state-owned PdV come just as the US is reinstating broad sanctions on the South American country. LNG Energy Group's Venezuela unit agreed two deals with PdV to boost output in five fields in the Nipa-Nardo-Niebla and Budare-Elotes blocks, which produce about 3,000 b/d of light- to medium-grade crude, the company said on Wednesday. The Canadian company, which operates in neighboring Colombia, would receive 50-56pc of production of the blocks. Venezuela's oil ministry declined to comment. But finalizing the contracts depends on providing required investment to develop the fields within 120 days of the contract signing on 17 April, LNG Energy said. And the signing came on the same day as the US reimposed oil sanctions on Venezuela and gave most companies until 31 May to wind down business. LNG Energy Group said it intends to comply with existing and upcoming US sanctions, noting that the conditional contracts were executed within the terms of the temporary lifting of sanctions — general license 44 — but it will abide by the new license 44A. The reimposition of US sanctions on Venezuela prohibits new investment in the country's energy sector, at the threat of US criminal and economic penalties. "The company will assess in the coming days the applicability of license 44A to its intended operations in Venezuela and determine the most appropriate course of action," LNG Energy said. "The company intends to operate in full compliance with the applicable sanctions regimes." The two blocks are in the adjacent Anzoategui and Monagas states, part of the Orinoco extra heavy oil belt. Most of Venezuela's output is medium- to heavy-grade crude. Both PdV and Chevron have drilling rigs working in those two states, in separate workover and drilling campaigns. Venezuela is now producing above 800,000 b/d, after the US allowed Chevron to increase production and investment under separate waivers. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US economic growth slows to 1.6pc in 1Q
US economic growth slows to 1.6pc in 1Q
Houston, 25 April (Argus) — The US economy in the first quarter grew at a 1.6pc annual pace, slower than expected, while a key measure of inflation accelerated. Growth in gross domestic product (GDP) slowed from a 3.4pc annual rate in the fourth quarter, the Bureau of Economic Analysis (BEA) reported on Thursday. The first-quarter growth number, the first of three estimates for the period, compares with analyst forecasts of about a 2.5pc gain. Personal consumption slowed to a 2.5pc annual rate in the first quarter from a 3.3pc pace in the fourth quarter, partly reflecting lower spending on motor vehicles and gasoline and other energy goods. Gross private domestic investment rose by 3.2pc, with residential spending up 13.9pc after a 2.8pc expansion in the fourth quarter. Government spending growth slowed to 1.2pc from 4.6pc. Private inventories fell and imports rose, weighing on growth. The core personal consumption expenditures (PCE) price index, which the Federal Reserve closely follows, rose by 3.7pc following 2pc annual growth in the fourth quarter, although consultancy Pantheon Macroeconomics said revisions to the data should pull the index lower in coming months. The Federal Reserve is widely expected to begin cutting its target lending rate in September following sharp increases in 2022 and early 2023 to fight inflation that surged to a high of 9.1pc in June 2022. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more