Angola Becomes China's Largest Oil Supplier As Beijing Stockpiles Record Amounts Of Crude

Tyler Durden's picture

Overnight China's customs data revealed that with imports from both Russia and Saudi Arabia posting modest declines in the past month, Angola once again became China's largest crude supplier for the second time in September, taking the top position from Russia. China imported 4.19 million tonnes of oil from the southern African nation last month, up 45.8% from a year ago. That meant Angolan shipments stood at 1.02 million barrels per day, below 1.11 million bpd seen in August, the last time the country was the top exporter to China. according to Reuters

China imported record volumes of crude oil last month, eclipsing the United States as the world's top buyer of foreign oil as Beijing's state reserves shipped in cheap crude to fill new storage tanks. China's Pivate "teapot" refiners boosted runs to a record 55.98% as of Sept. 29.

The amount of crude oil heading east from ports on Africa's west coast is expected to reach a five-month high in September, partly driven by trading houses such as Trafigura and Gunvor, according to a Reuters survey.

Furthermore, it seems that as Saudi Arabia and Russia continue to posture for market share, the west African nation will be the winner for the foreseeable future: Chinese demand for Angolan oil, which is cheaper and deemed to offer stable supply, is set to accelerate in October as the refinery maintenance season comes to an end.

In the first nine months of 2016, Angola was also China's third-largest supplier. Imports jumped 17.7 percent on-year to 34.39 million tonnes (916,229 bpd) in the period, data showed.

Imports from Iraq jumped 58.4 percent in September from a year earlier to 4.07 million tonnes, or 989,400 bpd. In the January to September period, imports grew 10.3 percent from a year ago to 706,155 bpd. Imports from Russia were down 2.14 percent year-on-year in September at 962,620 bpd. Saudi Arabia supplied 949,500 bpd, down 1.29 percent.

While Saudi Arabia still holds the position of top suppler year-to-date, with shipments at 1.03 million bpd, the latest customs data will likely mean that both Saudi Arabia and Russia will accelerate their head to head fight for Chinese market share to regain the top position, by either boosting output or by further cutting prices to compete with the African oil-exporting nation.

What is also notable about the latest data Chinese oil import data  is that despite an apparent drop in oil demand of 0.36% y/y to 10.12m b/d, China stockpiled crude oil at a record daily rate of 1.17m b/d in Sept. vs 1.14m b/d in Aug., according to Bloomberg calculations based on General Administration of Customs data.  China bought ~873k b/d surplus crude in Jan.-Sept., highest for the period since 2004 when Bloomberg started tracking customs data.

Where is the excess oil going? Most likely toward China's strategic petroleum reserve. Bloomberg agrees, and notes that the stockpiling rate will persist throughout year-end as nation prepares for filling new SPR tanks in Zhoushan, Huizhou and Jinzhou, according to ICIS-China.

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Looney's picture

 

Angola is moving up on the neocons’ list of countries to destroy.

I hope I’m wrong.

Looney

JRobby's picture

Stock up before the price increase!

Hyh? What price increase? (Laugh track Deafening!!!!!!!  Central Planners Snickering!!!)

Gilnut's picture

Stock up before WAR!

 

FIFY

MalteseFalcon's picture

Isn't some peak oil nutcase going to jump in here and say Angola's oil fields are depleted?

Frederico's picture

Hey there Looney. I'm not sure you are aware of a book called "In Search of Enemies" written by CIA whistleblower John Stockman.

It pretty much details the reasons behind a 30 y old bloody civil war supported by both the CIA and the KGB. It goes to great lenght to explain how Kissinger, after being humiliated in Vietnam, decided to open a new war front, even though there was increasing domestic pressure for the CIA to stop its undercover wars.

He details how the war made no sense and how Agostinho Neto, the doctor and leader of the liberation movement in Angola, was actually pro-America, had no communist ideals, and wanted to establish warm relations with the US (let's not forget US oil companies had been in Angola as early as the late 50's, in the Cabinda region and Neto said he would allow them to continue to do business).

John was the head of the Angolan task force, and resigned and turned whistleblower after realising the war made absolutely no sense, and they would eventually lose it, since the opposition they were supplying (Savimbi from UNITA and Robert Holden from FNLA) were both unorganized, patholigical psycopaths, with a thirst for blood.

Anyway I'm telling you all this because I'm an Angolan myself (Angolan father and Portuguese mother) and I'm currently residing here and working in finance.

I've been working on a theory, that predits a renew of the conflict thru proxies, specially now that both the US and Russia are at crossroads. I would like to know if you have any pertaining information to support this. I've noticed that Angola has been moving closer to the US in the last two years (specially after the US put pressure on South Africa to forbid the export of physical US dollars to the country)and has signed the FACTA agreement, and the new head of the Central Bank has just come from Washington, where apparently the US might "reform" the Angolan banking system (which has been on the verge of collapse since early 2014, when the currency devalution started, losing about 40% of its value).

But, I would also like to mention that the President of Angola (Eduardo dos Santos) has just delivered a state of the nation speech, where he critized some behavious by the US, but how much of this is rethorical, and how much is real I can't tell. What I can say is that the country has moved closer to the US while criticizing it nonetheless.

Anyway, maybe you have some information, but I'm also wondering if the neocons are already planning a second war here.

I hope we're both wrong.

 

Cheers

 

 

 

neversink's picture

Angola is already controlled by the Chinese. They own the government and have shipped millions of Chinese laborers to that country. Therre is no wildlife left in Angola to speak of. 

sinbad2's picture

That won't stop the US, the US will simply get the Government it installs to seize all Chinese assets, just like in Libya.

ZippyBananaPants's picture

Trump 'we ship all our stuff to Gina'
Go Trump!

King Tut's picture
King Tut (not verified) Oct 24, 2016 9:43 AM

Where are the chinks putting it all?

Kokulakai's picture

Storage tanks.

Strategic reserves?

Wile-E-Coyote's picture

Umm, you would think a war was coming or something.....oh wait!

Rich Stoehner's picture

Wouldn't it just be easier to keep it in the ground until needed instead of pumping it out shipping it around the planet then pumping it back into the ground?

Amun's picture

Anything is better than fiat USD

One wonders how long before China bought all of Africa with worthless YOUs it holds from US

Spend it whilst you can

sinbad2's picture

Yes it would, but it would not be safe from a US Naval blockade that the US is trying to arrange.

China isn't spending huge amounts of money on oil storage, and trading routes that circumvent US naval power for fun.

just the tip's picture

they are refining it and shipping/exporting a refined product.  gasoline in this boat.  kerosene in this boat.  diesel in this boat.  it has two effects, or affects, whichever.  one is the refined product when off loaded goes straight into the shipping pipeline.  two is the refined product cuts the refining capacity necessary to sustain production.  thereby reducing the workforce operating the refinery.  it's a win for china.  it's a win for the exporter/importer.  it's a loss for the refinery and/or refining industry of the importing country.  it's a loss for the refinery worker of the importing country.

the short answer would have been it's just like dealing with china for any commodity.

max_leering's picture

"we came... we saw... they all died"   <<<cackle-cackle-cackle>>>

Heavenlysunshine's picture

China should also buy Venezuela's oil, while it's cheap....and at the same time show some solidarity

to their marxist friends.

SoDamnMad's picture

 Angola is a lot closer, a medium gravity, sweet, low sulfur oil while Venezuela's oil is thick, sour, higher sulfur $hit. But Venezuela's babes are hot, Angola not.

UndertheDRADIS's picture

Verified. My Venezuelan in-laws are quite attractive. As soon as the Chavez Administration took Petroleos de Venezuela's capital replenishment fund for vote buying "social programs," I knew they were screwed.

bankbob's picture

Venezuelan oil is Very hard to refine.  

When Venezuela offered the Chinese a 3 dollar a barrel price break - the Chinese loaded it in tankers and shipped it to Houston because they could not refine it themselves.

_SILENCER's picture

Chinese war prep. Buy cheap, go long.

bankbob's picture

I think the Chinese see the instability in the Gulf.  Iran and Saudi Arabia are already fighting 4 proxy wars in the Middle East.  One cruise missile to Karg Island or one destroyer in the straits of Hormuz and oil flow could be cut in half.

Rockfish's picture

Stock up before the supply cut. 

sinbad2's picture

When China started investing and sourcing oil from Sudan, a civil war broke out.

When China started investing and sourcing oil from Libya, a civil war broke out.

I guess the CIA will now turn its eye on Angola.

General Titus's picture

The Fabian Socialists of the 19th century wrote about plans to destroy the white christian nations of Africa, and than to hand over Africa to communist China, looks like its happening