menu
spacer
 
| Ander Nieuws week 20 / Midden-Oosten 2010 |
 
 
 
Is China filling the gap in Iranian gasoline imports?

 
Financial Times
May 5, 2010
Kate Mackenzie (blog Energy Source)
 
Iran's oil minister may have considered the threat of gasoline import sanctions "a joke" last month, but a Reuters report on Wednesday suggests that the country's motor fuel imports may have dropped as much as 20 per cent in May, compared to last month.
 
Citing industry sources, the report says companies are pulling back from Iran, amid growing talk of sanctions over Iran's nuclear programme.
 
Total is continuing to sell gasoline to Iran — the company is famously bold in its dealings with politically sensitive countries — and accounting for 50 per cent of the country's imports, according to the report. But with traditional suppliers such as Malaysia's Petronas and Russia's Lukoil bowing out, along with big commodities trading houses Glencore, Trafigura and Vitol, who else is filling the gap — to the extent that it is being filled?
 
Well, that might be China. As some observers have noted, China has added gasoline refining capacity in recent months. According to Barclays Capital, exports have more than doubled in the year-to-March, while imports were at zero.
 
This is despite domestic demand for gasoline lagging, as JBC Energy analysts wrote on April 9:
In China, the strain of rising crude prices has been felt by refiners as the government has chosen not to change retail fuel price caps since November 10, 2009. The government has said it would make discretionary fuel price changes when the price of a crude basket moves by 4% over a working month. But no change has been forthcoming despite the recent uptick in the price of crude. Road transportation fuel demand, particularly for gasoline, has lagged behind the boom witnessed in vehicle sales, which can partly be attributed to Chinese retail prices being higher than those wealthier consumers have to pay in the US.
As another Reuters report noted last month, both Sinopec and Chinaoil appear to be shipping gasoline to Iran. While western refiners struggle with excess capacity, China is boosting its own capacity - and finding a market.
 
Original link
 

 
 
| Ander Nieuws week 20 / Midden-Oosten 2010 |