Business
Asia overtaking the West in Africa oil imports
(Reuters) – Asia is importing record volumes of West African oil this year, rebuilding stocks after relatively low shipments in December, Reuters calculations based on industry and shipping data show.
Purchases of crude oil from Nigeria, Angola and other West African producers by Asian refiners will average around 1.8 million barrels per day (bpd) in February, down slightly from a revised 1.84 million bpd in January.
Imports in the first two months of 2012 have averaged around 1.82 million bpd, the highest level yet, trade sources say, and the first quarter is also likely to be a record.
“The trade east is as busy as ever,” said one West African crude oil trader with a large U.S. oil company. “This year already looks like it could be a record-breaker.”
Demand from Asia for West African crude oil, which typically is of fairly high quality with low levels of contaminants such as corrosive sulphur, has grown steadily over the last few years as the region’s emerging giants such as China and India consume more and more fuel.
Most oil exports from West Africa now head east, instead of west and north towards its more traditional consumers in the United States and Europe.
But quite small changes in demand and supply in different geographical markets can change the direction of cargoes, making it a good indicator of trends in the global spot market.
Traders and shippers say imports in February by Chinese buyers are set to be slightly lower than in the same month last year and in 2010, suggesting there has been no immediate rush to replace Iranian crude oil despite pressure for a global embargo on fuel from the Islamic Republic.
The United States and its allies in Europe and elsewhere are trying to put pressure on Iran to curb its nuclear programme, worried that Tehran is attempting to develop its own atom bomb.
Chinese buyers took 30 cargoes of West African crude, mostly from Angola, in February, compared with 31 cargoes in February 2011 and 32 cargoes in February 2010.
Negotiations
Analysts had expected Chinese buyers to take more West African crude cargoes in February as negotiations continue over term contracts between Iran and Chinese state oil companies.
Chinese buyers have made several high-profile purchases of crude oil from alternative sources of crude oil in recent weeks, moves traders said were designed to negotiate a better price for its imports of Iranian fuel.
Nigeria and Angola are Africa’s two largest exporters, shipping as much as 3.5 million bpd to international markets.
Chinese refiners typically buy very large quantities of Angolan crude, but many West African crude oil grades are lighter and sweeter than Iranian grades, so not all Asian refiners can switch easily from one to another.
Taiwanese buyers may also be seeking West African crude as an alternative to Iranian barrels, traders say. Refiners in Taiwan have so far bought around 10 million barrels of West African crude loading in 2012, up slightly from recent averages.
Trade sources say one Taiwanese refiner bought at least two cargoes, or 2 million barrels, of Angolan Cabinda crude, plus one cargo of Angolan Nemba crude and one cargo of Nigerian Bonny Light crude oil.
One Japanese buyer imported two cargoes of Gabonese Rabi Blend, possibly for burning, trade sources said.