China’s recovery may disappoint some oil moose, but one fact is incontrovertible: the world’s largest importer pulls a lot of crude by sea.
About 125 supertankers with a capacity to deliver 250 million barrels were en route to the Asian country late last month, ship tracking data compiled by Bloomberg showed. This is the highest in more than two years, and April cargo loading data also supports the idea that China will receive more.
The data puts numbers on what was known to be an increase in buying. In February, traders reported increased purchases by processors, including Unipec, the trading arm of refining giant Sinopec, with millions of barrels being sourced from the Middle East, the US and west africa
Traders involved in the Asian physical market say China’s appetite for oil is likely to remain relatively healthy, although it is unclear whether it will be as strong as earlier this year. Crude oil futures have been hammered of late amid concerns about a worsening economy, falling about 17% since mid-April.
Asian refiners typically reserve spot crude cargoes a couple of months ahead of when they are needed. The surge in purchases from China earlier this year following the departure of its Covid Zero policy led to a jump in supertanker traffic to China.
In terms of April actual cargo loads, shipments from Brazil, the US Gulf, the United Arab Emirates and the Russia Pacific region saw big gains, Bloomberg tanker tracking data showed.
Unlike most buyers elsewhere in Asia, Chinese refiners have been able to buy oil at a discount from producers in Russia as well as Iran and Venezuela, supporting their margins, traders said.
Notional refining margins for smaller independent refiners at the end of April were 1,012 yuan a tonne, or about $19 a barrel, up more than 20% from two weeks earlier, according to OilChem data.
–With the help of Alfred Cang.
