• 2 days Court rules DOE to implement Obama efficiency rules
  • 20 hours DOA to invest $6.5M in coal industry
  • 21 hours US to hold largest oil and gas lease sale in its history
  • 2 days Tillerson Seeks A Deal With Erdogan On Syria
  • 2 days White House considering steel and aluminum tariffs
  • 3 days Iraq Seeks $100 Bln to Rebuild Economy
  • 3 days Allegedly the Search For Aliens is Struggling Thanks to Cryptocurrency Mania
  • 19 hours New Rules to Phase Out Coal and Reduce Natural Gas in Canada
  • 2 days Amazon reaches $1.2 million settlement with EPA over illegal pesticide sales
  • 20 hours White House Not Even Close to Regulating Bitcoin Yet
  • 2 days U.S. Bancorp hit with $613M in penalties
  • 20 hours Experts said US losing ground to China on AI
  • 3 days Australia's solar power boom to double in a year
  • 3 days US intelligence warn against Chinese phones
  • 3 days Electric Buses to Reach Half of World Fleet by 2025
  • 3 days How Good Is Putin's Word?
Is This The Future For OPEC?

Is This The Future For OPEC?

Saudi Arabia and Russia could…

Oil Rig Count Rises As Prices Recover

Oil Rig Count Rises As Prices Recover

The oil rig count increased…

Saudi Oil Exports To Japan Jump To 35-Year High

Saudi oil

Japan imported 1.295 million barrels of Saudi oil daily last year, which was a 9.5-percent annual increase and the highest import rate since 1982, Japanese government data showed. A local refiner told S&P Platts the increase was a result of Saudi Arabia’s “operational flexibility, as well as they were basically flexible to accommodate our request for tolerance."

The increase came amid falling allocations for large Asian clients because of the production cut deal, but it also reflected Saudi Arabia’s particularly sharp cut in the production of heavier grades: only imports of Arab Extra Light to Japan jumped last year, by a hefty 39 percent, while imports of its other grades, including Arab Heavy, Arab Medium, and Arab Light all dropped by between 4 percent and 11 percent.

One Japanese energy industry insider, Japan Oil, Gas and Metals National Corp’s chief economist Takayuki Nogami, told S&P Platts that higher U.S. shale production and Libyan crude shipments to Europe were responsible for lower demand for Saudi crude in these two key markets. This probably contributed substantially to that “operational flexibility” as did falling exports to China, India, and South Korea.

The most notable decline in exports to China, came on the back of increased Chinese appetite for Russian crude. Last year, Russia dethroned Saudi Arabia as the top supplier to the world’s biggest consumer. Saudi shipments of crude to China averaged 1.04 million bpd, representing 12.4 percent of total imports. To compare, Saudi exports to Japan hit more than 40 percent of the total oil that Japan imported last year.

This strong Chinese demand for Russian crudes led to a logical increase in prices, which made these grades less attractive to Japanese refiners, reinforcing Saudi light’s appeal. One former Aramco adviser, Fareed Mohamedi, told S&P Platts that this premium for Russian ESPO crude made Japanese refiners look to Saudi Arabia. "It was all demand driven and later the Saudis realized it was a good market to capture," he said.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

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