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Business Standard
5 days ago
- Business
- Business Standard
Asia's oil lifeline at risk as Iran conflict threatens key trade routes
Oil buyers and traders across Asia are watching the escalation of a conflict around Iran with bated breath, as the top importing region braces for the impact of any disruption of exports from the Persian Gulf. Asia buys more than four-fifths of all the crude produced in the Middle East, and 90 per cent of that goes through the Strait of Hormuz, according to data from Kpler SAS. Here are three key concerns for the Asian market as the conflict expands: The Iran-China link China, the world's largest oil refiner, gets about 14 per cent of its crude from Iran, Kpler data show. Actual flows are likely higher, with some imports from the Islamic Republic masked as shipments from not just Malaysia, but also the United Arab Emirates and Oman, in order to circumvent US sanctions. While China's larger state-owned processors seek to avoid breaching the bans, the country doesn't as a whole recognize unilateral US sanctions. And these discounted flows are vital for a hard-pressed private refining sector. There's growing concern those shipments could be disrupted. That has boosted demand for crude that can load on the Indian Ocean side of the Strait, including Abu Dhabi's Murban and Omani crude. Other grades that may benefit from any threat to Iranian flows are Russian ESPO, which loads from the Far East port of Kozmino, as well as Angolan varieties. Iran's fuel exports Much of that supply eventually finds its way into ship-refueling hubs including Fujairah in the UAE, Singapore and Malaysia. The so-called straight-run fuel oil that can replace crude is typically exported to the relatively simple, low-margin processors in China known as teapots. Iran also has a lot of natural gas — sharing one of the world's largest deposits with Qatar. While the Islamic Republic uses most of that domestically, it sells by-products including liquefied petroleum gas and condensates internationally. China's giant plastics sector relies on Iran for almost a quarter of its imports of LPG, which can be used for cooking and heating but also processed into petrochemicals used as plastic building blocks. That relationship has only intensified after flows from the US, traditionally China's largest supplier, collapsed because of trade conflicts earlier this year. 'If there is a complete stoppage of Iranian LPG material or even, say, a halving of the average intake to China, China has few alternatives of substance,' said Samantha Hartke, head of market analysis for the Americas at Vortexa Ltd. Iran's influence on key shipping routes The vast majority of Asia's imports come through the Strait of Hormuz, making this waterway a focus for oil merchants. While Iran may choose not to block the conduit, it's also able to threaten the safety of navigation through the Red Sea — the shortest route between Asia and Europe — using proxies such as Yemen's Houthis. About 9 per cent of global seaborne trade normally passes through the Bab el-Mandeb chokepoint, or more than $2 trillion worth of goods a year. That may affect Asia's supply from Russia, which has turned to markets in the East after being increasingly shunned by the US and traditional buyers in Europe because of its invasion of Ukraine in 2022. Ships carrying those massive volumes — ranging from flagship Urals crude to naphtha — must decide whether they continue to risk the Red Sea route, or face weeks of delays by going around South Africa instead.
Bloomberg
24-04-2025
- Business
- Bloomberg
Russia Fuel Exports Tick Up as Naphtha Cushions Diesel Slide
Russian oil product exports edged higher this month as a boost in naphtha sales helped offset a decline in diesel flows. Refined fuel exports climbed to 2.24 million barrels a day through April 20, according to data compiled by Bloomberg from analytics firm Vortexa Ltd. That's largely unchanged from March volumes, but is about 13% higher than a year ago.
Russia Today
17-04-2025
- Business
- Russia Today
China replacing US oil with Canadian
China has been importing record amounts of crude oil from Canada and drastically reducing supplies from the US in light of the trade war with Washington, Bloomberg reported on Wednesday. Washington and Beijing have implemented a series of reciprocal tariff hikes over the past two months in light of which the latter has slashed purchases of US oil by roughly 90%, according to the outlet. China previously indicated that it would not implement more tariff hikes against US goods but would rather employ alternative ways to retaliate. Chinese crude imports from a port near Vancouver on Canada's Pacific coast soared to a record 7.3 million barrels in March and may exceed the figure this month, Bloomberg reported, citing data from London-based global oil and gas cargo tracking firm Vortexa Ltd. Chinese imports of US oil, meanwhile, have fallen to 3 million barrels per month from a peak of 29 million last June, it added. READ MORE: 'Stop blackmailing' – China to US China's direct imports of Canadian crude oil had historically been minimal, primarily due to infrastructure constraints. Chinese refineries have mainly sourced crude from the Middle East and Russia. Roughly 1.7% of China's total crude imports came from the US last year, according to Chinese customs data, down from 2.5% in 2023. Nearly all of Canada's oil is shipped to the US to be processed there or re-exported to Asia. However, the completion last May of the Trans Mountain Expansion pipeline, which takes crude to Canada's Pacific coast, provided the country with an alternative route to export more volumes directly, primarily to Asia, thus reducing its reliance on the US. READ MORE: Here's why Trump really wants to get his hands on Greenland and Canada 'Given the trade war, it's unlikely for China to import more US oil,' Bloomberg quoted Wenran Jiang, president of the Canada-China Energy & Environment Forum, as saying. 'They are not going to bank on Russian alone or Middle Eastern alone. Anything from Canada will be welcome news.' China accounted for roughly 5% of US crude oil exports last year, according to ship-tracking data from Kpler. Russia remains China's largest supplier of crude oil. Russian shipments to China reached the highest level on record in 2024. The increase in recent years is largely attributable to the discounts being offered on Russian crude. China's imports of oil from Saudi Arabia, its second-largest supplier, declined by 9% year-on-year in 2024.
Bloomberg
18-03-2025
- Business
- Bloomberg
Turkey Shifts Away From Russian Crude as Tupras Buys From Brazil
Turkey is showing signs of diversifying its crude supplies — including importing Brazilian oil — after its largest refiner moved to restrict purchases of Russian barrels in the wake of sweeping US sanctions. Of the roughly 650,000 barrels a day of crude that Turkey imported so far this month, just 19% is from Russia, according to data compiled by Bloomberg from analytics firm Vortexa Ltd. That's down from a share of more than 50% for the whole of last year.
Bloomberg
05-03-2025
- Business
- Bloomberg
Russian Fuel Flows Surge to 1-Year High Despite Refinery Attacks
Russian oil products exports remain resilient with volumes climbing last month to the highest in a year, despite repeated drone strikes against the country's refining operations. Seaborne exports jumped to 2.5 million barrels a day in February, according to data compiled by Bloomberg from analytics firm Vortexa Ltd. Observed volumes rose from previous estimates as a rush of shipments late in the month fueled an overall 7% gain from January levels. That lifted average monthly exports to a one-year high.
