Chinese oil traders are seeking short -term benefit from the American trade war and the decline in crude prices, regardless of concerns about the long -term economic damage to this war, according to the British Financial Times.
According to two analysts, crude oil imports increased to China last March and continued to increase in April, with the country renewing its stocks despite expectations that the weak global economy will reduce demand.
Kepler, a data company that tracks oil tankers heading to China, reported that the country imports approximately 11 million barrels per day, its highest level in 18 months, and exceeds 8.9 million barrels per day in January.
Wider storage
The British newspaper reported that what began as a purchase of Iranian oil, for fear of imposing additional US sanctions, has evolved into a wider storage of crude oil after President Donald Trump’s ads led to customs duties, as well as increasing OPEC production, to the low prices to its lowest level in 4 years.
Brent crude later recovered to circulate at a level of more than $ 65 a barrel on Friday, and the US Bank Stanley believes that the prices will remain under pressure, as it will drop to an average of $ 62.50 a barrel in the second half of the year.
The newspaper quoted the Swiss Oil Market analyst Giovanni Stonovo as saying, “China has always been highly sensitive to prices. If the price decreases, it stores it, then reduces its purchases when it rises. I expect this month’s data be higher than last month thanks to this strategic purchase,” the newspaper quoted the Swiss Oil Market analyst Giovanni Stonovo as saying.
Johannes Rubol of Kepler pointed out that Chinese oil stocks have decreased, and he expected the current level of imports in the next few months, as buyers take advantage of low prices to restore their stocks.
“We may witness an increase in imports even if the demand for (oil) does not rise by the same force,” he said.
Reduce the order
Most analysts believe that the economic impact of the trade war between the United States and China will begin to reduce the demand for oil in the second half of this year, with the start of slowing the economy.
But it seems that the turmoil has not yet seriously affected China’s demand for car and aircraft fuel, and some refineries have suggested their annual maintenance to continue the production of gasoline, diesel and aircraft fuel in light of the low crude oil prices and the recovery of profit margins, according to the Financial Times quoted Emma Lee, an analyst at Fortaxa for market data based in Singapore.
“Nobody knows what will happen in the coming months, especially the second half. But the demand seems good, so I don’t expect a significant decrease,” she added.
China is the largest oil importer in the world, and the main oil market that was forced to get out of other markets, including Russian, Iranian and Venezuelan crude.
Chinese buyers reduced their purchases of Iranian oil when the United States for the first time imposed sanctions on a refinery in the eastern Shandong Province, having many Chinese private refineries, after importing a record of 1.8 million barrels per day of Iranian oil last March, and purchases decreased to 1.2 million barrels per day in April, according to Kepler.
Careful in private refineries
“There is warning inside private refineries, and there were logistical obstacles with sanctions imposed on some carriers,” Rubol said, adding that the amount of Iranian crude oil stagnated in oil tankers in the sea increased quickly.
“There are currently 40 million barrels in 36 ships. 18 million barrels in Singapore, 10 million in the Yellow Sea, and about 4 million in the southern Sea of China,” he added.
He added that private refineries will probably continue to import Iranian crude oil thanks to its reduced prices.
“The margins of their profit are slim, and they have no alternative. Either they import from Iran or bankrupt … many of them are not related to the American financial system, so the consequences are less even when they are affected,” Robol said.
