Angola Becomes China’s Largest Oil Supplier As Beijing Stockpiles Record Amounts Of Crude

[Shotgunner51]

Angola Becomes China’s Largest Oil Supplier As Beijing Stockpiles Record Amounts Of Crude
Editor / 4 hours ago

Overnight China’s customs data revealed that with imports from both Russia and Saudi Arabia posting modest declines in the past month, Angola once again became China’s largest crude supplier for the second time in September, taking the top position from Russia. China imported 4.19 million tonnes of oil from the southern African nation last month, up 45.8% from a year ago. That meant Angolan shipments stood at 1.02 million barrels per day, below 1.11 million bpd seen in August, the last time the country was the top exporter to China, according to Reuters

China imported record volumes of crude oil last month, eclipsing the United States as the world’s top buyer of foreign oil as Beijing’s state reserves shipped in cheap crude to fill new storage tanks. China’s Pivate “teapot” refiners boosted runs to a record 55.98% as of Sept. 29.

The amount of crude oil heading east from ports on Africa’s west coast is expected to reach a five-month high in September, partly driven by trading houses such as Trafigura and Gunvor, according to a Reuters survey.

Furthermore, it seems that as Saudi Arabia and Russia continue to posture for market share, the west African nation will be the winner for the foreseeable future: Chinese demand for Angolan oil, which is cheaper and deemed to offer stable supply, is set to accelerate in October as the refinery maintenance season comes to an end.

In the first nine months of 2016, Angola was also China’s third-largest supplier. Imports jumped 17.7 percent on-year to 34.39 million tonnes (916,229 bpd) in the period, data showed.

Imports from Iraq jumped 58.4 percent in September from a year earlier to 4.07 million tonnes, or 989,400 bpd. In the January to September period, imports grew 10.3 percent from a year ago to 706,155 bpd. Imports from Russia were down 2.14 percent year-on-year in September at 962,620 bpd. Saudi Arabia supplied 949,500 bpd, down 1.29 percent.

While Saudi Arabia still holds the position of top suppler year-to-date, with shipments at 1.03 million bpd, the latest customs data will likely mean that both Saudi Arabia and Russia will accelerate their head to head fight for Chinese market share to regain the top position, by either boosting output or by further cutting prices to compete with the African oil-exporting nation.

What is also notable about the latest data Chinese oil import data is that despite an apparent drop in oil demand of 0.36% y/y to 10.12m b/d, China stockpiled crude oil at a record daily rate of 1.17m b/d in Sept. vs 1.14m b/d in Aug., according to Bloomberg calculations based on General Administration of Customs data. China bought ~873k b/d surplus crude in Jan.-Sept., highest for the period since 2004 when Bloomberg started tracking customs data.

Where is the excess oil going?

Most likely toward China’s strategic petroleum reserve. Bloomberg agrees, and notes that the stockpiling rate will persist throughout year-end as nation prepares for filling new SPR tanks in Zhoushan, Huizhou and Jinzhou, according to ICIS-China.


https://theinternationalreporter.or...s-beijing-stockpiles-record-amounts-of-crude/

 

[Shotgunner51]

Angola, just like many other African countries, is huge (Angola spans across 1.25 million sqkm of land, 1600 km of Atlantic coastline), sparsely populated (only 25 million) and rich in natural resources (oil, gold, etc). China should continue with ongoing decades-long Africa strategy, and expand further.

Stockpiling (as I have mentioned last year) seems proceeding smoothly, and has even escalated to 1.17 million bpd (barrels per day). At this rate, in the next 365 days (one year) addition to SPR (strategic petroleum reserves) will be 430 million barrels, corresponding to reduction of FXR (forex reserves) of about $22~24 billion. It can go faster as long as physical logistics allows, until targeted level is reached. What's the target SPR level? My guess is minimum 1.5 billion barrels latest by year 2020.

 

[Kyle Sun]

never thought Angola is so important.

 

[Shotgunner51]

never thought Angola is so important.

That's normal, many important things don't make headlines, you should know about so-called "mainstream" media and its populist readership.

Yes Angola is important, being top supplier of oil is a testimony to that, in fact, whole of Africa is important. The continent spans across 30 million skqm of land, coastlines on one sea in the Arabic north and two Oceans, it's source of mineral ores, petroleum and agricultural products for China. Though sparsely populated, it's billion plus population is still big market for China's manufactured exports (electro-mechanicals, infra, telecom, consumer goods).

For example, you heard of a country called Niger? Don't confuse it with Nigeria. It is the earliest production base for China Nuclear International Uranium Corporation (Sino-U), which began operation at Azelik in 2010. Azelik has reported resources of 13,000 tU at 0.2%, owned by Societe des Mines d'Azelik SA (SOMINA), a joint venture established in 2007 in which the government of Niger has a 33% interest and Sino-U holds 37.2%. The remainder of the SOMINA is owned by Chinese investment management company ZXJOY Invest, and China-based private mining and investment firm Trendfield Holdings.​

Africa is a continent of treasure.

 

[ahojunk]

It's a good for China to have three big suppliers of petroleum. In this situation, China is not overly dependent on any one supplier.

From what I gather, the oil price is mainly driven by the consumers and not by the suppliers. What a big shift.

 

[AndrewJin]

It's a good for China to have three big suppliers of petroleum. In this situation, China is not overly dependent on any one supplier.

From what I gather, the oil price is mainly driven by the consumers and not by the suppliers. What a big shift.

Right.....now consumers have more power!

 

[Shotgunner51]

It's a good for China to have three big suppliers of petroleum. In this situation, China is not overly dependent on any one supplier.

From what I gather, the oil price is mainly driven by the consumers and not by the suppliers. What a big shift.

Being the world's largest importer of crude, China does have very diverse sources. Last year (2015), total imports was US$134.3 billion (second largest import item, only after IC chipset from Taiwan/SK), top 15 sources were as below, 6 of them exceeds $10 billion:

1. Saudi Arabia: $20.8 billion
   
2. Russia: $17.2 billion
   
3. Angola: $15.9 billion
4. Oman: $14 billion
5. Iraq: $12.7 billion
6. Iran: $10.7 billion
7. Kuwait: $5.7 billion
8. Brazil: $5.3 billion
9. United Arab Emirates: $5.1 billion
10. Venezuela: $5.1 billion
    
11. Colombia: $3.1 billion
12. Sudan (North + South): $2.9 billion
13. Congo: $2.3 billion
    
14. Kazakhstan: $1.9 billion
    
15. Australia: $1 billion

While imports from Russia and GCC may hold at current level, I expect to see increases (in physical volume) from Angola, Iraq, Venezuela, Columbia and Congo. China needs to complete targeted SPR, trims down FXR, as soon as possible.

Source http://www.worldstopexports.com/crude-oil-imports-by-country/