West African crude oil exports to China hit four-year low

West African crude oil exports to China were set to fall to a four-year low in October, reflecting the key buyer nation’s cooled

interest in spot crude imports in the early autumn.

The decline, shown in a Reuters survey of oil traders and shipping fixtures, pushed overall exports to Asia to the lowest in more than a year, despite buying from several Indian refineries including Reliance and state-run IOC, HPCL and BPCL.

Refinery runs in Asia are lower as a result of seasonal maintenance, which capped their need for crude oil cargoes. Run cuts earlier this year in China on the back of poor margins had also lowered the country’s interest in spot cargoes.

China’s November buying interest had already perked up, with trader Unipec taking several November loading spot cargoes from Angola. But exports for October, at around 24 cargoes or a total of 735,000 barrels per day (bpd), were the lowest since 2011, according to Reuters data.

But top OPEC exporter Saudi Arabia is expected to cut the prices of its crude oil exports to Asia in November in a move to maintain its market share. A cut could make it more difficult for African grades to compete.

Additionally, traders cautioned that some of the planned exports, particularly those to India, could fall through as a result of complications brought about by Nigeria’s “letter of comfort” requirement, which was implemented earlier this month and asks vessel owners to provide a guarantee that vessels will not be used in theft.

Robust buying interest in Europe, where refinery margins remained well supported, and the United States, helped absorb the surplus cargoes left from Asia’s lower purchases.

COUNTRY OCTOBER BPD SEPTEMBER BPD ‘000s

CARGOES ‘000s CARGOES

CHINA 24 735 28 887

INDIA 18 552 15 475

INDONESIA 4 123 5 158

TAIWAN 3 92 2 63

JAPAN 1 31 0 0

S. KOREA 0 0 0 0

OTHERS 3 92 3 95

TOTAL 53 1,624 53 1,678