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.

By Nicola de Sanctis

West African crude to Asia-Pacific