Cargoes of West African crude oil sailing east are on track to fall in August on fierce competition, shaky demand and disruptions in Nigerian loadings that forced at least one cancelled cargo, according to a Reuters survey of shipping fixtures and traders on Tuesday.
A total of 55 cargoes, for 1.685 million barrels per day (bpd) are booked to sail to Asia this month. The total is just under 2 percent lower than the planned bookings in July, but is more than 8 percent lower than August last year.
Overall buying in Asia is in question as refinery margins hit five-year lows last month due to a growing excess of refined products. Some refineries are already processing less crude, while others are preparing for maintenance later in the third quarter.
At the same time, nearly all crude oil sellers are targeting Asia. Imports of Iranian crude from China, India, Japan and South Korea increased markedly in June, the latest month of data available, as Iran’s efforts to regain market share lost during years of snactions paid off.
As a result, some West African oil has been edged out.
The biggest difference from a year earlier was in bookings for India, due in part to the unpredictability of Nigerian oil loadings.
While the shipments to India were slightly higher than July, they are some 36 percent lower on a barrels per day basis compared with August 2015. State-run refiner HPCL was forced to cancel its booking of the VLCC Desh Vaibhav last month after ExxonMobil declared force majeure on Qua Iboe crude due to a pipeline problem.
While IOC rebooked the same vessel to carry other Nigerian grades, including Agbami, to India, Exxon has yet to reissue a Qua Iboe loading programme.
India is set to take an almost equal amount of Angolan and Nigerian cargoes in August, with six of the former and seven of the latter.
China’s bookings fell slightly from July. Key trader Unipec had offered some of its August-loading Angolan oil cargoes for sale elsewhere in the Asia, which sources said was related in part to flooding across China that disrupted some refinery operations.
Energy Aspects had estimated that refinery throughput would fall by around 200,000 bpd in July, which others said would have a knock-on effect on the crude the country chose to import later.
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