Asia scrambles for West African oil before U.S. sanctions hit Iran
LONDON, (Reuters) - Shipments of West African oil to Asia are set to hit a two-month high in October as Chinese refineries scramble for alternatives to Iranian crude before U.S. sanctions take effect on Nov. 4.
Loadings for Asia will rise to 2.52 million barrels per day (
This compares to September's 2.27 million
Chinese imports from West Africa are set to rise to a record 1.94 million
West African grades tend to produce a large proportion of high-value distillates, such as diesel or jet fuel, much like Iranian crude oil, making it an attractive replacement.
Other buyers across Asia and Europe have also said they would cut back on purchases of Iranian oil, unleashing a burst of demand for West African and other crudes rich in distillates, such as grades from Saudi Arabia or the North Sea.
The looming deadline on Iranian crude is not the only factor behind the surge in demand for October cargoes to China.
Independent Chinese refineries, known as teapots, eased up on imports earlier in the third quarter for maintenance. Now they are restocking before the end of the month, as their import quotas are based on purchases made from January to October.
"The resurgence of Chinese teapot buying could not have come at a more awkward time for the oil market," consultancy Energy Aspects wrote.
"China was widely expected to need to restock. But its renewed appetite for crude has been bolstered by panic buying from teapots," the consultancy said. Elsewhere in Asia, India is offering some respite for the stretched West African market, buying about 451,000
India's state-run refiners tend to take less West Africa crude at
State firms Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) will take 10 of the 14 India-bound cargoes.
Nigerian Agbami, Qua Iboe
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