While Saudi Arabia and Russia are competing fiercely for oil exports to China, Angola managed to outrun the two main rivals. The two ambitious oil producers are not able to reach an accord on how to bring the global oil market back into balance. Recently, the relatively small African country has become the leader in oil supplies to China.
Importantly, China is the second largest oil consumer after the US. Therefore, China’s oil market is the top spot among global exporters. Referring to China’s customs administration, oil imports from Angola surged the whopping 46% in September on a yearly basis to 4.19 million tons. Iraq is the second China’s oil supplier. Russia is ranked third among oil exporters to the Chinese market. In September, Russian oil imports fell 2.1% and Saudis imports dropped 1.3% in annual terms to 3.96 million tons and 3.8 million tons respectively. On the whole, the giant Asian oil consumer imported 33.06 million tons in September 2016, which is 18.6% up from September a year ago.
Nevertheless, to secure the status of top China’s supplier requires a lot of efforts. For example, Russia managed to take the lead in three of nine months this year. Since early 2016, Russian oil producers stepped up supplies to China by 26% to 38.1 million tons compared to January-September of 2015. Russia is still conceding to Saudi Arabia as the kingdom imported 38.75 million tons in the same period this year. Commodity experts see two reasons behind surprising Angola’s success. Chinese refineries are keen to benefit from cheaper Angolan oil as the African blend trades below both Russia’s ESPO and the Middle East’s Dubai benchmark blends. Besides, at present both Russia and Saudi Arabia are mainly focused on the ways to tackle the persistent oil glut. Recently, oil ministers of the largest oil exporting countries confirmed their intention to stabilize the global oil market.
