(Repeats with no changes to text. The opinions expressed here are those of the author, a columnist for Reuters.)
By Clyde Russell
LAUNCESTON, Australia, Oct 2 (Reuters) - China’s imports of crude oil offer a picture of which exporters are doing the heavy lifting of reducing supplies, and which countries are benefiting the most from the efforts of OPEC and its allies to rebalance the market.
While looking at customs data from the world’s biggest crude importer isn’t a definitive study of global oil market dynamics, it’s important as exporters are well aware that China has been leading demand-growth in recent years, a trend likely to continue.
China imported 281.1 million tonnes of crude in the first eight months of this year, equivalent to 8.44 million barrels per day (bpd), according to customs data.
This is up 12.3 percent on the same period in 2016, or about 950,000 bpd.
This makes China the major contributor to global demand-growth so far this year, given that the International Energy Agency expects world oil consumption to rise 1.6 million bpd in 2017 from 2016.
The breakdown of the Chinese import numbers shows who is gaining market share and who is not.
Saudi Arabia was China’s leading supplier in the first eight months of 2016, but has slipped to third place behind Russia and Angola in the January-August period this year.
The kingdom’s exports to China were 1.03 million bpd in the first eight months, down 1.7 percent from the same period last year.
While this looks like a relatively small decline, it becomes far more significant if you assume that the Saudis had been able to grow their exports at the same pace as overall imports by China.
If China’s imports of Saudi crude were up at the 12.8 percent overall growth rate, it would have meant that the kingdom supplied 1.18 million bpd.
That’s 150,000 bpd more than what the Saudis actually supplied, and this is perhaps a good indication of how much the Saudis have given up by restricting their output in pursuit of rebalancing the global crude market and shifting prices higher.
The Saudis were one of the main drivers behind last November’s agreement by the Organization of the Petroleum Exporting Countries and allied producers, including Russia, to curb output by a combined 1.8 million bpd.
This initial six-month deal was later extended to at least the end of March next year as it became clear the market was rebalancing slower than what the producers had hoped for, and prices remained locked in a relatively narrow band.
Global benchmark Brent crude was at $56.71 a barrel in early Asian trade on Monday, not much higher than the $53.94 it closed at the day after OPEC and its allies announced their agreement last November.
So, if the Saudis have foregone crude market share in China, which other countries have joined them, and which haven’t?
Among those party to the agreement to restrict output, Angola and Russia have managed to boost their share of China’s crude imports.
China imported 1.05 million bpd from Angola in the first eight months of 2017, a gain of 16.6 percent from the same period last year.
If the growth in imports from Angola had matched the overall rate, it would have meant that China bought 1.02 million bpd, meaning Angola has supplied an extra 30,000 bpd over what it would have if it has just maintained its market share.
Imports from Russia were 1.16 million bpd in the first eight months, a gain of 13.2 percent. This works out to an extra 10,000 bpd over the steady market share number.
Iran has lost 83,000 bpd in the first eight months compared to China’s overall growth rate, while Iraq has forgone 17,000 bpd.
For exporters outside the OPEC and allies deal, Brazil has been a large gainer, with exports in the first eight months rising 41.8 percent to 480,000 bpd, which is 100,000 bpd more than if they had merely matched China’s overall growth rate.
The standout is the United States, with China importing 128,000 bpd in the first eight months, a massive leap of more than 1,000 percent, and an extra 116,000 bpd over what imports would have been if the growth rate matched China’s overall increase of 12.3 percent in the first eight months.
In some ways the Chinese oil import numbers are a microcosm of the issues in the global crude market.
China shows that the burden of rebalancing the market isn’t being shared evenly by those party to the production reduction agreement.
It also shows that the Chinese have been able to quite easily replace supplies from those producers curbing output.
Editing by Joseph Radford