• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 30 mins Real Death Toll In CCP Virus May Be 12X Official Toll
  • 13 hours WE have a suicidal player in the energy industry
  • 16 mins TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
  • 3 hours The Most Annoying Person You Have Encountered During Lockdown
  • 4 hours Saudi Aramco struggling to raise money for this year's dividend of $75 billion. Now trying to sell their pipelines for $10 billion.
  • 28 mins Which producers will shut in first?
  • 1 min How to Create a Pandemic
  • 18 hours Washington doctor removed from his post, over covid
  • 1 hour A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand
  • 4 hours Death Match: Climate Change vs. Coronavirus
  • 17 hours KSA taking Missiles from ?
  • 17 hours Shale Legs
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

This New Project Changes The Global Oil Market

We saw one of the most significant shifts in a long while for energy markets last week. With a key pipeline opening that will radically change global flows of crude oil.

The project in question is the China-Myanmar oil pipeline. Which Chinese state media said on Thursday has now opened for test runs.

The pipeline is one of the most ambitious constructions the global energy sector has seen. Running 771 kilometres from Myanmar’s western coastal port of Kyaukphyu, across the entire length of that country, and into the Chinese city of Kunming. The diagram below from Stratfor shows the route. Related: Russia And China’s Growing Energy Relationship

ChinaMyanmarPipeline

The line has been an ongoing project for years now. With construction having begun in 2010, and been completed in May 2014. A twin natural gas pipeline that’s also part of the development was put into operation last year.

The size of the pipeline is notable. But its location is even more significant when it comes to the worldwide movement of oil.

The pipe provides the first overland access between China and shipments of crude sailing from the Middle East.

Up until now, Middle East tankers were forced to sail through the Straits of Malacca between Indonesia and Malaysia in order to reach Asian buyers. A route that’s noted to be treacherous, and which adds almost two weeks to the journey for an average Saudi Arabia-to-Shanghai shipment.

Such crude can now be offloaded on the Myanmar coast and sent straight into the heart of China. Giving buyers here a major cost saving–and giving China a huge leg up over other Asian consumers like Japan and Korea when it comes to securing supply. Related: How The Economy Is Tied To Energy

The capacity on the new line is significant–able to move 160 million barrels yearly, or about 440,000 barrels per day. Equivalent to just under 0.5% of total global oil demand.

That might just be enough to change prices for some crude blends. Watch for increasing competition amongst other Asian oil buyers, and increased shipments coming into this region from suppliers outside the Middle East.

Here’s to strategic assets,

Dave Forest

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