Traders may di­vert some Oman crude if China de­mand slows: H E Rumhi

Muscat Daily - - BUSINESS -

If the de­mand of crude oil de­creases in China due to coro­novirus out­break, the sul­tanate ex­pects traders to di­vert some sup­plies to other des­ti­na­tions.

China, which is now strug­gling with the eco­nomic im­pact of deadly virus, is the big­gest buyer of Oman’s oil, with some­times more than 90 per cent of the coun­try’s monthly crude sales go­ing to the top Asian buyer.

“We sell most of our ex­port to traders, even re­finer­ies tend to trade too," H E Mo­hammed al Rumhi, Oman’s Min­is­ter of Oil and Gas, told S&P Global Platts when asked what Oman in­tends to do if China’s de­mand slows.

“They nor­mally sell to China and I ex­pect them now to di­vert some vol­ume to other des­ti­na­tions which we don’t re­strict,” H E Rumhi said, as re­ported by S&P Global Platts.

Crude traders re­ported on Tues­day that re­finer­ies in China were cut­ting runs as a re­sult of fall­ing prod­uct mar­gins, such as those for naph­tha, gaso­line and mid­dle dis­til­lates. Traders also re­ported see­ing prompt Fe­bru­ary load­ing and March load­ing car­goes be­ing resold in China, which is likely to add pres­sure to the Mid­dle East crude prices in the April spot mar­ket, ac­cord­ing to S&P Global Platts re­port.

Oman, which is a mem­ber of the OPEC+ al­liance, sold over 69 per cent of its oil out­put in De­cem­ber to China, which im­ported an av­er­age of 680,000 bar­rel per day of crude from the coun­try in 2019, ac­cord­ing to data from China Cus­toms and the In­ter­na­tional En­ergy Agency.

Oman’s oil ex­ports to China touched to a new monthly high of 26.83mn bar­rels in Novem­ber, rep­re­sent­ing al­most 93 per cent of the coun­try’s to­tal oil ex­ports dur­ing that month, ac­cord­ing to the sta­tis­tics re­leased by Oman’s Min­istry of Oil and

Gas. Re­fin­ers in China are poised to cut both crude im­ports and through­put as the coro­n­avirus out­break re­duces con­sump­tion, with trans­porta­tion, man­u­fac­tur­ing and in­dus­trial ac­tiv­i­ties all slow­ing down, S&P Global Platts re­ported last week. The re­port said that Chi­nese re­finer­ies may de­cide to keep buy­ing Omani crude to build stock­piles even if they are tem­po­rar­ily re­duc­ing out­put.

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