• 6 minutes Trump vs. MbS
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes WTI @ $75.75, headed for $64 - 67
  • 10 hours Satellite Moons to Replace Streetlamps?!
  • 1 day US top CEO's are spending their own money on the midterm elections
  • 4 hours EU to Splash Billions on Battery Factories
  • 8 hours U.S. Shale Oil Debt: Deep the Denial
  • 16 hours The Balkans Are Coming Apart at the Seams Again
  • 1 day OPEC Is Struggling To Deliver On Increased Output Pledge
  • 22 mins Owning stocks long-term low risk?
  • 4 hours The Dirt on Clean Electric Cars
  • 1 day Uber IPO Proposals Value Company at $120 Billion
  • 18 hours 47 Oil & Gas Projects Expected to Start in SE Asia between 2018 & 2025
  • 1 day A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 1 day 10 Incredible Facts about U.S. LNG
  • 1 day U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Trending Discussions

Soaring Indian Oil Demand Grabs OPEC’s Attention

India

Last week, we discussed changing trends in Iraqi crude flows into Asia. Total deliveries of OPEC crude to China rose last year by 300,000 bpd, as cartel members looked to keep one of its key growth markets well supplied.

Even though Iraqi deliveries into China reached the highest on our records in November at a million barrels per day, arrivals in 2017 were actually down versus the prior year, as Iraq shifted its focus towards India and the U.S. instead

While Iraqi deliveries to China edged lower versus 2016 volumes, other cartel members such as Angola, Venezuela, Kuwait and Libya all saw flows increase.  

Angola and Venezuela led the charge in terms of higher deliveries, as both nations continue to service their debts with China (via oil, as opposed to cash). A rebound in Libyan production meant more found its way to Chinese shores, while Saudi Arabia sent just a smidge more than it did in 2016, dialing back on exports elsewhere.

YoY OPEC to China.jpg

(Click to enlarge)

It has been well documented that Saudi Arabia focused its export cuts in the second half of last year on the largest and most transparent global market - i.e., the U.S. - where it felt it would get the most bang for its buck. 

The drop in Saudi flows, in combination with lower Venezuelan deliveries (due to both lower production from the Latin American nation, as well as quality issues with its crude), has meant that OPEC deliveries to the U.S. were 72,000 bpd lower last year than in 2016. That equates to a drop of 26 million barrels year-on-year. 

Countering the drop in flows from Saudi, Venezuela and also Kuwait, we have seen stronger arrivals from Nigeria and Libya - as both boosted production last year - while deliveries from Iraq rose the most. They were up over 150,000 bpd on the prior year, averaging nearly 600,000 bpd in 2017. 

YoY OPEC to US.jpg

(Click to enlarge)

As we move into the second year of the OPEC production cut deal, Saudi Arabia is starting 2018 following a similar trend to Iraq, boosting flows to South Asia (think: India), while dialing back on its flows bound for East Asia (think: China, Japan, South Korea). East Asia is Saudi's largest market; it accounted for over 40 percent of its crude deliveries last year.  Related: Trump Proposes Most Aggressive Offshore Drilling Plan Ever

Even though Chinese independent refiners have had their import quotas boosted for this year, rising demand out of India is rallying crude imports. Loadings bound for East Asia last month from Saudi Arabia dropped to a seven-month low, while grades bound for South Asia reached an eight-month high: 

Saudi crude to East and South Asia Jan 2018.jpg

(Click to enlarge)

By Matt Smith

More Top Reads From Oilprice.com:


x


Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News