SAUDI'S OIL FOR JAPAN
PLATTS - Saudi Arabia's crude oil supplies to Japan rose to a 10-year high in 2016, underlining the kingdom's strong will to defend its share in the ever competitive Asian markets.
Saudi Arabia's crude supplies to Japan last year averaged 1.18 million b/d, up 4.7% year on year, and accounted for roughly 36% of Japan's total imports of 3.31 million b/d, according to S&P Global Platts calculations based on Ministry of Economy, Trade and Industry data.
Saudi Arabia's market share in Japan rose from 33% in 2015, marking the third consecutive year-on-year rise.
"We appreciate that [Saudi Arabia] maintained simple but logical pricing [for crude supplies]," a source with a Japanese refiner said, adding that price was the decisive factor in his company's decision to buy Saudi crudes.
Saudi Arabia's market share strategy has worked effectively in Japan as a consequence of its pricing, which were often competitive against similar grades from the Middle East, market sources said.
The rise in Saudi crude oil supplies came even as Japan's total crude imports in 2016 fell to their lowest since 3.19 million b/d imported in 1987.
Japan's 2016 imports fell 2% year on year.
Japanese crude imports from Saudi Arabia rose in 2016 on the back of the kingdom's response to incremental demand for its oil, coupled with spot supplies from state-owned Saudi Aramco's leased storage in Okinawa, despite no increase in term import contractual volumes, market sources said.
The boost in Saudi oil market share in Japan is good news for the Middle East supplier, which recently lost its position as China's top oil supplier to Russia. In contrast, Japan's crude imports from Russia in 2016 dropped 30.6% year on year to 198,473 b/d.
The declining crude exports to China are "making the Saudis very nervous," Fareed Mohamedi, chief economist of energy consultancy Rapidan Group, said in December at an energy seminar of the Institute of Energy Economics, Japan (IEEJ).
SAUDI SUPPLIES TO REMAIN STRONG
Saudi crude supplies to Japan are expected to remain robust in 2017, supported by occasional spot shipments out of state-owned Saudi Aramco's leased storage in Japan's Okinawa island in the southwest.
In January, Saudi Aramco shipped around 2 million barrels of spot crude on a VLCC from Okinawa to Japan's JX Nippon Oil & Energy.
Last year, a total of around 3.14 million barrels of Saudi Arabian crude was shipped from Okinawa, according to Platts calculations based on METI data.
The Saudi crude shipments from Okinawa were made mainly to Japan, but some of it also went to China.
JAPAN SELECTIVELY IMPORTING
Saudi Arabia was not alone in raising supplies to Japan in 2016, when the country was increasingly selective about where to source its Middle East barrels.
Japan's Iranian crude imports, for instance, surged 33.3% year on year to 227,142 b/d in 2016 after US and EU sanctions against Iran were lifted in January.
Imports of Iranian oil surpassed an average of 189,076 b/d in 2012 when the sanctions were imposed.
Imports from Kuwait slid 9.6% year on year to 226,138 b/d in 2016 on the back of rising Iranian Heavy supplies.
Crude supplies from the UAE in 2016 fell 5.1% year on year to 807,436 b/d, due in part to increased use of Murban crude at the Ruwais refinery, a market source said.
Middle East crudes accounted for 86.6% of Japan's total imports in 2016 -- the highest level since a 86.9% share in 2011.
This was the 20th consecutive year that the market share of Middle East crudes was above 80%, and the region is expected to be the main supplier in 2017.
|October, 16, 12:25:00|
|October, 16, 12:20:00|
|October, 16, 12:15:00|
|October, 16, 12:10:00|
|October, 16, 12:05:00|
|October, 16, 11:55:00|
Saudi Arabia is considering delaying the international portion of the giant initial public offering of its state oil company until at least 2019, according to people familiar with the situation, who said a domestic share sale in Riyadh could still happen next year.
But we expect a rise in the sector's NPL ratio and muted credit demand in the second half of 2017 and 2018, reflecting the slowing economy. GDP growth slowed to 1.4% in 2016 from 3.4% in 2015 and we expect it to be below 1% in 2017 and 2018.
The Organization of Petroleum Exporting Countries and allies including Russia have been cutting oil production this year to bring fuel inventories in industrialized nations back in line with the five-year average.
The Japanese government will offer $10 billion to support firms bidding to build liquefied natural gas (LNG) infrastructure around Asia, the Nikkei business daily said on Monday.