Tag Archives: oil

China reduces Iran oil buy as US and EU sanctions loom

The United States and the European Union’s increasingly firm stance against Iran’s nuclear ambitions have, as my colleague Raymond Karam writes, potentially undermined the security of mideast oil supply.

In the face of sanctions, Iran has had one relatively stable customer in China, but The Telegraph reports today that China has reduced its oil purchases and expressed firm opposition to Iran developing nuclear weapons.

“China adamantly opposes Iran developing and possessing nuclear weapons,” [Chinese Premier Wen Jiabao] said. …

The Washington Post reported that China trimmed its oil imports from Iran in January from a daily average of around 550,000 barrels to 285,000 barrels a day. …

“Iran would not have wanted China to make this statement, but Iran must understand that if it comes down to a choice China will not alienate itself from the rest of the world for the sake of single country,” said Yu Guoqing, a researcher on the Middle East at the Chinese Academy of Social Sciences. [full story]

This is an interesting year for international relations. The world may not end (notwithstanding the brief absence of Wikipedia), but presidential elections in the United States and Russia, a leadership transition in China, and parliamentary elections in Iran all make for less predictability.

[UPDATE Sun Jan 22 00:41:06 EST 2012] WSJ writes: “China’s imports from Iran could decline in the months ahead due to a dispute over commercial issues between China International United Petroleum & Chemicals Co., known as Unipec, and National Iranian Oil Co. Unipec has skipped imports of about 220,000 barrels a day from Iran in January and further delays could affect February orders as well.” So, though the international context continues to exist, there are of course other things going on…

Is Venezuela selling oil to China instead of to the U.S.?

The United States is importing less oil from Venezuela, and China is buying more. Is Venezuela putting its resources where Hugo Chávez’s mouth is and using the country’s major export as a geopolitical lever? Or are U.S. imports just catching up with a 10-year decline in Venezuelan production?

The U.S. Energy Information Administration released April data on Monday, revealing that imports of crude and petroleum from Venezuela in the first four months of 2008 fell 10.7 percent from the same period last year—from about 1.3 million barrels/day to about 1.16 million b/d.

If we take a longer-term view of U.S. imports of Venezuelan crude and petroleum, the drop is even more significant: Venezuela sold about 1.6 million b/d to the United States in January–April of 2005, as it had since the mid-1990s (except in the oil strike years of 2000 and 2003). This means that Venezuelan sales to the United States have declined 30 percent over the past three years. Why?

AP’s Rachel Jones reports that the drop is likely due to three factors: (1) falling demand in the United States, (2) falling production in Venezuela, and (3) Venezuela’s decision to sell more oil to China. Does this make sense? Let’s take a closer look at the numbers:

  1. Total U.S. oil imports in January–April 2008 dropped 2.5 percent compared with the same period last year (you can download the raw data here, or check out the Transpacifica digest below (after the jump). This, then, might explain one-fourth of the decline in imports from Venezuela.
  2. There are no reliable numbers on Venezuelan oil production, but those that exist (for example, the monthly OPEC report) indicate at most a 2 percent drop in production from last year—which, like the change in U.S. demand, would explain only part of the 10.7 percent drop in sales. Over the past 10 years, however, Venezuelan production has declined about 25 percent—about the same as the change in U.S. imports over the past three years (according to EIA data here).
  3. The AP report states that Venezuela now sends 250,000 b/d to China, up from next to nothing a few years ago. The story does not source this figure, and PDVSA, Venezuela’s state oil company, recently stated that China buys 398,000 b/d, as a result of increased CNPC operations. Venezuelan President Hugo Chavez has said that the country plans to sell China 1 million b/d by 2012.

Is China buying 250,000 b/d or more of Venezuelan oil? If so, does that purchase explain declining sales to the United States? Or would sales have declined anyway, as a result of falling production in Venezuela? What is the role of Chávez’s oil donations to countries throughout the region? Perhaps there are other explanations. If the United States wants control over how much oil it buys from Venezuela, the answer is critical. Continue reading

'Malaysia Bans Foreigners'? Look again.

An inexplicably terse headline has been making its rounds in my news feeds for the last couple of days. It would be big news, if only it were true.

“Malaysia Bans Foreigners,” cries the headline of an AP story published at the International Herald Tribune.

Well, no. The article outlines how non-Malaysian vehicles are being banned from gassing up within 50 km of the borders with Thailand and Singapore, since Malaysia is subsidizing fuel and they don’t want foreign freeloaders coming over just to take advantage of the subsidy.

So if you were planning to stop by Kuala Lumpur, and you’re not a Malaysian citizen, fear not. Just this: If you’re driving in from Thailand or Singapore, stop for gas before you get to the border and eat the high prices. Some desk editor needs to read the whole article (or even the lede) before writing the headline.