Saudi keeps top China crude spot as Iran plunges

Despite attacks in the Strait of Hormuz and on the Kingdom, tankers continue to supply China with record amounts of Saudi crude. (Shutterstock)
Updated 26 September 2019

Saudi keeps top China crude spot as Iran plunges

  • Despite attacks on Gulf refineries, Riyadh to Beijing oil flows continue to grow

BEIJING: Saudi Arabia held on to its spot as China’s largest supplier of crude in August for the second straight month, official customs data showed on Wednesday, although this month’s attack on Saudi oil processing facilities may end the run. 

Saudi oil arrivals in August in China, the world’s biggest oil importer, reached 7.79 million tons, or 1.83 million barrels per day (bpd), data from the General Administration of Customs showed, compared with 6.99 million tons in July and nearly double the previous year. 

Amid sanctions by the US on Tehran and rising Middle East tensions, China’s oil imports from Iran were 787,657 tons, down from July’s 926,119 tons and far below 3.28 million tons of a year ago. 

Most of the August arrivals were discharged at Jinzhou and Tianjin ports in China’s northeast, where it has state reserve and commercial tanks, indicating volumes continuing to flow into the country’s strategic storage sites, according to Refinitiv Oil Research. 

China said days after the drone attack on Saudi oil facilities that knocked out half the output of the world’s top oil exporter that the nation’s crude reserves, including stocks held at strategic petroleum storage sites and commercial inventories, were sufficient to cover 80 days. 

Imports of US crude oil reached 1.01 million tons last month, versus 1.5 million tons in July, with volumes likely to more than halve in September as Beijing started levying a 5 percent tariff as the trade war with the US escalated.

Imports from Russia, China’s second largest supplier for August, reached 6.02 million tons, up from 5.673 million tons in July and 5.7 million tons in August last year. 

Oil prices fell for a second day on Wednesday amid worries fuel demand could fall after US President Donald Trump doused recent optimism over China-US trade talks.

Brent crude futures were down by more than a dollar in early London trade on Wednesday. Nevertheless, the benchmark remains on track for its first monthly gain since June.

“Focus will return to faltering oil demand concerns as there is unlikely to be any quick resolution to US-China trade differences to positively shift economic expectations,” global oil strategist at BNP Paribas Harry Tchilinguirian told the Reuters Global Oil Forum.

Trump criticized China’s trade practices at the UN General Assembly on Tuesday and said he would not accept a “bad deal” in US-China trade negotiations.

Tanker off UAE sought by US over Iran sanctions ‘hijacked’

Updated 16 July 2020

Tanker off UAE sought by US over Iran sanctions ‘hijacked’

  • The circumstances of the hijack are still unclear and the boat has been tracked to Iranian waters

DUBAI: An oil tanker sought by the US over allegedly circumventing sanctions on Iran was hijacked on July 5 off the coast of the UAE, a seafarers organization said Wednesday.

Satellite photos showed the vessel in Iranian waters on Tuesday and two of its sailors remained in the Iranian capital.

It wasn’t immediately clear what happened aboard the Dominica-flagged MT Gulf Sky, though its reported hijacking comes after months of tensions between Iran and the US

David Hammond, the CEO of the United Kingdom-based group Human Rights at Sea, said he took a witness statement from the captain of the MT Gulf Sky, confirming the ship had been hijacked.

Hammond said that 26 of the Indian sailors on board had made it back to India, while two remained in Tehran, without elaborating.

“We are delighted to hear that the crew are safe and well, which has been our fundamental concern from the outset,” Hammond told The Associated Press.

Hammond said that he had no other details about the vessel., a website tracking the oil trade at sea, said it saw the vessel in satellite photos on Tuesday in Iranian waters off Hormuz Island. 

Hormuz Island, near the port city of Bandar Abbas, is some 190 kilometers (120 miles) north of Khorfakkan, a city on the eastern coast of the United Arab Emirates where the vessel had been for months.

The Emirati government, the US Embassy in Abu Dhabi and the US Navy’s Bahrain-based 5th Fleet did not respond to requests for comment. Iranian state media did not immediately report on the vessel and Iran’s mission to the United Nations did not immediately respond to a request for comment.

In May, the US Justice Department filed criminal charges against two Iranians, accusing them of trying to launder some $12 million to purchase the tanker, at that time named the MT Nautica, through a series of front companies. 

The vessel then took on Iranian oil from Kharg Island to sell abroad, the US government said.

Court documents allege the scheme involved the Quds Force of Iran’s paramilitary Revolutionary Guard, which is its elite expeditionary unit, as well as Iran’s national oil and tanker companies. The two men charged, one of whom also has an Iraqi passport, remain at large.

“Because a US bank froze the funds related to the sale of the vessel, the seller never received payment,” the Justice Department said. “As a result, the seller instituted a civil action in the UAE to recover the vessel.”

That civil action was believed to be still pending, raising questions of how the tanker sailed away from the Emirates after being seized by authorities there.

Data from the MT Gulf Sky’s Automatic Identification System tracker shows it had been turned off around 4:30 a.m. on July 5, according to ship-tracking website Ships are supposed to keep their AIS trackers on, but Iranian vessels routinely turn theirs off to mask their movements.

Meanwhile, the 28 Indian sailors on board the vessel found themselves stuck on board without pay for months, according to the International Labor Organization. It filed a report saying the vessel and its sailors had been abandoned by its owners since March off Khorfakkan. The ILO did not respond to a request for comment.

As tensions between Iran and the US heated up last year, tankers plying the waters of the Mideast became targets, particularly near the crucial Strait of Hormuz, the Arabian Gulf’s narrow mouth through which 20 percent of all oil passes. Suspected limpet mine attacks the US blamed on Iran targeted several tankers. Iran denied being involved, though it did seize several tankers.