Reuters: Saudi Arabia cut oil exports to its three largest Asian customers by nearly 4 percent in the fourth quarter against the third, while Iranian shipments rose to near year-ago levels, calculations based on official data showed. By Maryelle Demongeot
SINGAPORE (Reuters) – Saudi Arabia cut oil exports to its three largest Asian customers by nearly 4 percent in the fourth quarter against the third, while Iranian shipments rose to near year-ago levels, calculations based on official data showed.
The Saudi cuts of a total 88,000 barrels per day (bpd) support other evidence showing compliance with OPEC curbs that came into force on November 1. The Iranian shipments indicate that refiners in South Korea and China have taken up supplies rejected earlier this year by Japan.
Japan, South Korea and China together imported some 2.362 million bpd of Saudi crude during last quarter, or about a third of the kingdom’s total exports.
That was down a hefty 5.4 percent, or 135,000 bpd, from a year ago, when the three countries imported close to 2.5 million bpd of Saudi crude, Reuters calculations showed.
OPEC agreed to lower its supplies by 1.2 million bpd from November 1 in an attempt to shore up prices, with top exporter Saudi Arabia expected to bear the brunt with a 380,000-bpd reduction.
In December alone, the first month when reduced shipments would be reaching customers, Saudi exports to number-two market Japan were down 6 percent compared to October.
North Asia accounts for most imports of Saudi crude into Asia, with the OPEC linchpin selling an estimated half of its 7 million bpd exports to the whole of Asia.
Asian imports of Iranian crude rose 8.5 percent from the third quarter to the fourth, reaching some 1.022 million bpd. Iranian officials had said their OPEC curbs would only impact European, not Asian customers.
Despite a cut in imports by Japan at the start of last year due to geopolitical risks surrounding the world’s fourth-largest producer, exports to the three Asian consumers were only 2.2 percent lower than the fourth quarter of 2005, as South Korea and China stepped up purchases.
CHINA BUYS HALF OF OMAN
Data also illustrated a sharp rise in China’s appetite for Oman and Sudanese crude.
China ramped up imports of Middle East benchmark Oman crude by a third from the previous quarter, data show, some of which was thought to have been destined for the country’s new strategic petroleum reserves (SPR).
China imported some 320,000 bpd of Oman crude in the last quarter of last year, or about half of the Middle East country’s daily crude exports. Of these, 2.5 million barrels were seen heading to the country’s strategic storage tanks in November, industry sources said last year.
The country also imported 12.4 million barrels of crude for its strategic reserves in December, industry sources said last month. Though the grade’s breakdown was not given, traders said some of the Oman crude could have been moved into storage.
“They bought a lot with December arrival. It might have something to do with the SPR,” a Singapore-based trader said.
Chinese imports of Sudanese crude also surged, with Sudan becoming China’s sixth-largest crude provider after the African country started exporting its new Dar Blend crude in September.
Sanctions on Sudan and the crude’s acidity as well as high pour point have left it few customers in Asia, allowing Chinese refiners to buy at discounts as deep as $35 a barrel to dated Brent, much cheaper than rival West African or Middle East crude.
Q4 2006 QTR/QTR YR/YR Q4 share Q3 share
(bpd) PCT CHG PCT CHG Pct Pct
Total 4,040,564 -1 -6
Saudi 1,204,472 NC -8 30 29
UAE 996,699 -12 -9 25 28
Qatar 459,928 +3 +11 11 11
Iran 494,543 +15 -15 12 11
Kuwait 295,673 +9 -1 7 7
Total 2,855,150 NC +10
Saudi Arabia 466,456 -4 +7 16 17
Angola 415,597 +8 +6 15 14
Oman 319,552 +34 +75 11 8
Iran 305,598 -7 +18 11 12
Russia 274,051 -17 -10 10 12
Sudan 227,983 +145 +72 8 3
Total 2,503,696 +3 +2
Saudi 691,011 -10 -7 28 31
UAE 443,924 +3 NC 18 18
Kuwait 277,967 +12 +34 11 10
Iran 221,641 +21 +9 9 7
Qatar 125,793 -9 -7 5 6