Another Contender Emerges in Battle for China Oil Market Spoils 9/22
Another Contender Emerges in Battle for China Oil Market Spoils
September 21, 2015 — 4:38 AM CDT
Iraq overtakes Russia as China 3rd-bigggest supplier in August
Saudi Arabia keeps lead even as sales slip; Angola is No. 2
The race among the top sellers of crude to the world’s biggest energy-consuming nation got a little tighter last month.
Iraq overtook Russia to become the third-largest supplier to China, while Oman edged past Iran in sales of oil to Asia’s biggest economy. Saudi Arabia kept the lead in the race even as its shipments slipped, data from General Administration of Customs in Beijing on Monday show. Cargoes from Angola rose, helping the African producer hold onto the No. 2 spot.
China remains the main safeguard against a further price meltdown as a drive to boost its strategic petroleum reserve helps alleviate a market glut. As a shale boom in the U.S. shrinks America’s need for overseas crude, producers are competing to supply the world’s second-biggest oil consumer, which is forecast by the International Energy Agency to account for about a quarter of growth in global demand next year.
“Iraq, with its booming domestic output, will make sure it stays ahead in the game to compete with its Middle East counterparts,” Gao Jian, an analyst at SCI International, a Shandong-based energy consultant, said by phone. “With U.S. demand for imports dwindling, all the major suppliers will look to Asia and China is the biggest market here.”
Iraq’s oil output reached a record 4.18 million barrels a day in July, the IEA said in its monthly report on Aug. 12. Shipments to China jumped 25 percent from a year earlier to 3.38 million metric tons in August, the customs data show. That compares with 2.65 million tons in July, when the Middle East nation was the fifth-biggest supplier.
China is the biggest oil buyer in Asia, a region that the IEA estimates will use 23.5 million barrels a day in 2015, or about 25 percent of worldwide consumption. The Paris-based agency predicts China will consume 11 million barrels a day this year.
Russia’s shipments slipped to 3.1 million tons in August from 3.77 million a month earlier, the data show. The nation in May briefly held the status of leading supplier, as a direct pipeline to northern China boosted exports of its East Siberia-Pacific Ocean crude and helped it race past Saudi Arabia.
Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, has since regained its top spot as it pumps near record amounts of crude in a bid to defend market share from competitors.
Cargoes from Iran surged 61 percent from a year earlier to 2.14 million metric tons in August. The Persian Gulf state is preparing to increase output and exports once international sanctions over its nuclear program are eased and has vowed to take back market share lost due to the measures.
China’s imports from Angola climbed 9.4 percent from a year ago to 3.52 million tons, the customs data show. Crude from Africa’s second-largest oil producer has a lower sulfur content than Middle East supplies, and refineries that run one variety will also need to process the other to balance the quality of feedstock, Tushar Tarun Bansal, a senior oil analyst in Singapore at industry consultant FGE, said earlier this month.