• 4 minutes Is The Three Gorges Dam on the Brink of Collapse?
  • 8 minutes The Coal Industry May Never Recover From The Pandemic
  • 11 minutes China Raids Bank and Investor Accounts
  • 5 hours Sources confirm Trump to sign two new Executive orders.
  • 9 hours Sometimes I Think Trump Supporters on This Forum Are Russians
  • 1 day CV19: New York 21% infection rate + 40% Existing T-Cell immunity = 61% = Herd Immunity ?
  • 14 hours No More Love: Kanye West Breaks With Trump, Claims 2020 Run Is Not A Stunt
  • 20 hours In a Nutshell...
  • 7 hours Better Days Are (Not) Coming: Fed Officials Suggest U.S. Recovery May Be Stalling
  • 1 day A Real Reality Check on "Green Hydrogen"
  • 15 hours During March, April, May the states with the highest infections/deaths were NY, NJ, Ma. . . . . Today (June) the three have the best numbers. How ? Herd immunity ?
  • 2 days Why Oil could hit $100
  • 4 hours Where is Alberta, Canada headed?
  • 2 days Why Wind is pitiful for most regions on earth
  • 12 hours Putin Paid Militants to Kill US Troops
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

Premium Content

Soaring Indian Oil Demand Grabs OPEC’s Attention

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:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




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