In April, Saudi Aramco delivered crude cargoes three times to China’s Zhoushan from its leased storage in Okinawa using the VLCC C Innovator, industry sources said. This might signal that China outperformed its neighbouring peers in demand recovery and absorbing excess crude oil in the regional market.
One of the sources noted that Zhejiang Petroleum & Chemical received the first two shipments as part of its term supply with Saudi Aramco. According to tanker tracking data, VLCC C Innovator delivered Saudi crude cargoes at Zhoushan from Okinawa over April 11-15, April 22-24, and April 30-May 2.
Zhejiang Petroleum & Chemical’s 400,000 bpd refinery has been running at above 100% rates in recent months, with April rates reaching 120%. Robust margins in China give refiners incentives to increase their utilization rates in April. China’s crude throughput inched up 0.8% from a year ago to 13.16 million bpd in April. Major state refiners’ combined run rates also increased from 70% in March to around 75.8% in April.
In contrast, South Korean and Japanese refiners are cutting both term and spot crude oil purchases on high inventories of unprocessed feedstock and unsold refined products due to weak demand amid the coronavirus pandemic. South Korea’s crude imports fell 15.6% year-on-year to 2.69 million bpd in April. Meanwhile, at least one Japanese refiner received a notification from Aramco about a 20-40% reduction in crude allocation for June loading.
