SINGAPORE/BEIJING: China’s crude oil imports from Malaysia stood near record levels in July, customs data showed, with traders and a tanker-tracking analyst citing oil either transhipped from Venezuela or blended with Venezuelan crude for the unusual growth. Crude imports from Malaysia rose to 1.35 million tonnes last month, more than double from a year earlier, data from China’s General Administration of Customs showed on Sunday. That was just below the previous record set in May of 1.38 million tonnes, triple the average monthly volume in the first four months of 2019.
Imports for the first seven months of 2019 totalled 5.64 million tonnes, versus 5.17 million tonnes a year earlier. Emma Li, analyst with Refinitiv Oil Research, estimated that about 500,000 tonnes of the Malaysian supplies arriving in July were transhipped from Venezuelan crude supplied by Russian state oil firm Rosneft.
The growing supplies of Venezuela-originated oil come after the Russian firm stepped in as the top trader of Venezuelan crude as traditional dealers like Vitol and Trafigura avoided dealing directly with Venezuelan state firm PDVSA for fear of breaching secondary US sanctions. Venezuelan crude, mainly heavy grade Merey, was either blended or moved into other vessels at Malaysia’s transhipment hub of Linggi and Tanjung Bruas, and renamed in new grades such as Singma and Mal Blend, according to Refinitiv Oil Research. Rosneft did not respond to a Reuters’ request for comment.
Most of these cargoes found a home in east China’s Shandong province, a hub for China’s independent refineries, as well as the port of Tianijn in north China. “About four to five refineries in Shandong have been taking Malaysian blends which look like Venezuelan oil with similar specifications,” said an executive with one Shandong independent refiner. Prior to May, China’s imports of Malaysian crude were mostly of one grade, Nemina, blended from West African crudes, and went to primarily one buyer, state trader ChemChina, according to Refinitiv’s Li. Only a fraction of Malaysia’s locally produced crude oil, which typically is light and of lower sulphur content and thus more pricey, moves to China. – Reuters
