London: China bought huge amounts of Middle East and West African crude as oil prices were collapsing in November.
Oil tankers loaded 6.5 million barrels a day from ports in the two regions for Chinese buyers in November, a 26 per cent increase compared with the average over the prior 10 months, ship tracking compiled by Bloomberg shows. With deliveries taking between 25 and 40 days, many of the barrels will arrive this month or even in January.
The surge in flows happened just as Brent crude was plunging 22 per cent in November, deepening a rout that got underway early the prior month. The deliveries are another piece of evidence — from shipping rates, to imports, to cargo-loading data — that indicate heightened purchasing by the Asian country.
China’s implied crude oil inventories expanded by a record 45 million barrels in November as refinery throughput declined and imports expanded, the Paris-based International Energy Agency said in a monthly report on Thursday.
The November shipments will also offer the country a little buffer against any supply shocks. The Organisation of Petroleum Exporting Countries and its allies said Dec. 7 that they would restrict output by 1.2 million barrels a day starting in January. China has also been engaged in a trade war with the US, although there are now signs the dispute is easing.
Crude exports to China from the Arabian Gulf, including non-Opec member Oman, rose by 27 per cent to more than 4.8 million barrels a day compared with the January-October average of 3.8 million. Exports from West Africa climbed to 1.8 million, up from average flows of 1.4 million in the prior 10 months.
China’s crude demand also got a boost from the surprise quota announcement in November, and start of trial runs at the Hengli mega refinery in mid-December.