China's biggest refiner, China Petroleum & Chemical as well as Nippon Oil of Japan are trying to reduce their dependence on the Middle East by importing oil from Africa and Russia.
Angola and not Saudi Arabia is China's largest supplier this year and Japanese refiners are buying crude from the Russian Far East. As the world's fastest growing automobile market, Asia finds refined oil from Africa and Russia more attractive since it yields more gasoline and diesel than Mideast supplies.
This trend will benefit companies like EXxonMobil, BP, Total and OAO Lukoil that are drilling in Africa and Russia and have been largely excluded from production in the Middle East where state-owned monopolies control the oil industry.
The Asia-Pacific Petroleum Conference in Singapore will certainly have diversifying oil supplies on its agenda. With a fifth of the world's oil consumption flowing through the Strait of Hormuz, concern over disruption of oil supplies in that region by Iran have increased.
China Petroleum, Nippon Oil, Indian Oil and SK of South Korea are few Asian refiners that have bought new grades of crude oil for the first time this year as sour-crude from the Mideast produces less gasoline and refiners in Asia are trying to produce more transportation fuel.
The share of producers such as Saudi Arabia, Oman and Yemen in the world's second-largest energy market has fallen with China importing from Africa, Kazakhstan, Russia and Venezuela.
Angola shipped 15 million tons of crude oil to China, in the first 7 months of the year, 13 percent more than Saudi Arabia.
While shipments from the Persian Gulf to China rose by 5.8 percent in the first half of this year, during the same period imports from Africa rose by 22 percent.
Sinopec imported Chinguetta crude from Mauritania and Azeri light and Hamaca Blend from Venezuela. Japan which relies on the Mideast for 90 percent of its oil needs has started to import crude to the tune of 700,000 barrels from Sakhalin island in Russia.
Indian Oil bought Girassol crude from Angola and Erha from Nigeria. Hindustan Petroleum and Bharat Petroleum have purchased Azeri light and Erha.
Refiners are taking Winston Churchill's words, "energy security lies in diversity" very seriously now.
Picture Courtesy: www.flickr.com
Leave a comment