(April 22): Chinese oil majors are selling cargoes of West African and other crudes, according to traders familiar with the deals, a rare move that follows utilisation cuts across government-owned refiners as the war in Iran upends global supply.
At least two companies — Sinochem Group and the trading arm of Sinopec Group, known as Unipec — have sold cargoes from Nigeria, Angola and Ghana for loading next month, said traders familiar with the matter. The grades include Angola’s Girassol, Clov and Cabinda, Nigeria’s Agbami and Okwuibome, as well as Ghanan Jubilee, they added.
Buyers include refiners from Taiwan and Indonesia, the traders said. They asked not to be named as they’re not authorised to speak publicly.
Spokespeople for Sinochem and Sinopec did not respond to requests for comment.
China has allowed state refiners to tap commercial storage, helping to shield them from higher market prices and scarce supply, but the processors have also lowered processing rates. These were at less than 70% of capacity last week, the lowest level since June 2022, according to data from Mysteel Oilchem.
Private processors, known as teapots, have instead been told to keep processing rates high at all costs.
See also: Iran tankers laden with crude go dark to sail past US blockade
The war in Iran and the blockade of the Strait of Hormuz have all but halted crude shipments from leaving the Persian Gulf, creating an unprecedented global oil supply shock. Prices have surged as a result, with refiners in Asia scrambling for alternatives from other producing regions, including resold cargoes from China.
While it is rare for the world’s top importer to sell crude, it is not unheard of as refiners optimise supply. Early last month, private refiner Shenghong Petrochemical International Pte sold around one million barrels of Iraqi Basrah Heavy crude to another Asian refiner via a tender, traders said.
Chinese companies have procured supply from ports outside the Persian Gulf, including the United Arab Emirates’ Fujairah, Oman’s Mina Al Fahal and Saudi Arabia’s Yanbu port in the Red Sea, the traders said.
Uploaded by Arion Yeow
