• 4 minutes US-backed coup in Venezuela not so smooth
  • 7 minutes Why Trump will win the wall fight
  • 11 minutes Oil imports by countries
  • 13 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 1 hour Climate Change: A Summer of Storms and Smog Is Coming
  • 2 hours Itt looks like natural gas may be at its lowest price ever.
  • 2 hours Venezuela: Nicolas Maduro closes border with Brazil
  • 2 hours Teens For Climate: Swedish Student Leader Wins EU Pledge To Spend Billions On Climate
  • 14 mins Amazon’s Exit Could Scare Off Tech Companies From New York
  • 9 mins Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 20 hours North Korea's Kim To Travel To Vietnam By Train, Summit At Government Guesthouse
  • 15 hours students walk out of school in protest of climate change
  • 1 day Washington Eyes Crackdown On OPEC
  • 1 day Europe Adds Saudi Arabia to Dirty-Money Blacklist
  • 1 day Some Good News on Climate Change Maybe
  • 1 day America’s Shale Boom Keeps Rolling Even as Wildcatters Save Cash
Alt Text

Why WTI Is A Global Oil Market Benchmark

As U.S. crude oil production…

Alt Text

Oil To Rise As U.S., China Outline Trade Deal

The deadline for U.S.-China trade…

Alt Text

Brent Crude Hits 2019 High At $65

Brent Crude hit $65 a…

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

This Crude Oil Benchmark Just Rallied To A Three-Year High

Oman is the largest oil producer in the Middle East that is not a member of OPEC. It is also part of the OPEC / NOPEC production cut deal, committing to a 45,000 barrel-per-day cut from its output level of just over one million barrels per day. This equates to an export cut of about 36,000 bpd, according to our calculations.

The price of the Omani crude benchmark has just rallied to over a three-year high, seemingly driven higher by strong demand from Asia. But the rise also appears due to lower Omani supply, with our ClipperData showing crude exports from the country closing out September at the lowest monthly level since December 2014.    

China is the leading destination for Omani crude, accounting for 70 percent of its deliveries this year, with Asia accounting for a whopping 96 percent of total barrels. In fact, the only destinations outside of Asia this year have been the UAE, and the US. Andeavor's Wilmington refinery received 637,000 bbls of Omani medium sour crude earlier this month - the first delivery to the U.S. since last November.

(Click to enlarge)

We discussed yesterday Kirkuk crude exports from the Kurdish region of Iraq, amid mounting fears of a supply disruption to the Kirkuk-Ceyhan pipeline. This is stoking immediate supply concerns, while Chinese demand also appears to be boosting the need for Omani crude, as loadings of Angolan crude in November are set to drop to a thirteen-month low. Angola is in a similar situation to Oman, in that China is overwhelmingly the leading destination for its crude:

(Click to enlarge)

Omani crude exports are likely to come under further downward pressure in the coming months, as the expansion of the Sohar refinery is set to be completed, with refining capacity boosted to 116,000 bpd, up from 84,000 bpd. The additional crude demand is set to be met by domestic supply. 

Related: Trump’s Solar Tariff Confusion Creates An Opportunity

At the same time, Chinese demand is looking fairly tasty, as exemplified in the charts below. Demand growth year-to-date is projected up 550,000 bpd through July, with growth across the board from LPG to fuel oil, jet/kerosene to gasoline.

The multi-year high in the Omani crude benchmark seems the result of a double whammy: limited supply amid a greater pull from China.

(Click to enlarge) 

By Matt Smith

More Top Read From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




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