China's crude imports from Malaysia surged to a record high of 500,000 b/d in September, hinting at a rise in ship-to-ship (STS) transfers of sanctioned crude off the country.
Malaysian imports rose fivefold from a year earlier and were 50pc above the most recent high of 332,000 b/d in July, detailed data from China's general administration of customs (GAC) show. But there has not been any comparable increase in Malaysian output in recent months, suggesting blenders in the country are disguising the origins of crude from sanctions-hit suppliers such as Venezuela before shipping the cargoes on to China.
A total of 10.3mn bl (343,000 b/d) of Venezuelan crude was discharged at Chinese ports in September, of which 6.4mn bl underwent STS transfers off Tanjung Bruas in the strait of Malacca, according to data from oil analytics firm Vortexa. The transfers involved two very large crude carriers and four Suezmaxes.
Chinese customs data showed 138,000 b/d of imports from Venezuela last month, down by 27pc from a year earlier.
State-controlled PetroChina in August rescheduled its October-arrival loadings from Venezuela. Russia's Rosneft has since become the dominant seller of Venezuela Merey crude to China's independent refiners, which use the supplies to produce bitumen.
Saudi Arabia maintained its position as the leading crude exporter to China in September, although deliveries from the country slipped to 1.74mn b/d from 1.83mn b/d in August. Saudi imports averaged 1.6mn b/d in January-September, up by 56pc from the same period last year. New refineries coming on line in China are using Saudi crude as base-load supplies, supporting demand.
China's Iraqi imports surged by 31pc from a year earlier to 1.18mn b/d last month, making up some of the shortfall in Iranian supplies, which dropped by 75pc over the period to 131,000 b/d. Arrivals from the US fell by 52pc from a year earlier to 123,000 b/d, after China imposed a 5pc import tariff on 1 September.
China's imports from the UK almost tripled from a year earlier to 323,000 b/d in September to reach the highest level since January. Chinese buyers have been taking more Forties crude, sending imports from the UK to 259,000 b/d in the first nine months of 2019, almost double year-earlier levels.
Rising refinery capacity and restarts from turnarounds sent China's total crude imports to a five-month high of 10.35mn b/d in September, while refinery runs hit a record 13.75mn b/d.
The fourth quarter is the traditional peak season for Chinese refineries, while a new round of crude import quotas issued this week will support buying at independent refineries — indicating imports may stay strong for the remainder of this year.
Source:Argus
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