LONDON: China's loadings of West African crude oil were on track to hit their highest barrel-per-day level in 19 months in April, according to a Reuters survey of shipping fixtures and traders on Thursday.
The boost is due to strong demand from the country's independent refiners, known as teapots, as well as a deal between Angola and Sinochem that significantly increased term cargoes heading east from February.
Booming demand in the world's largest energy consumer helped push overall April loadings from West Africa to Asia to just over 2 million barrels per day (bpd), the highest since July 2015.
China's bookings of West African oil, which were set to reach at least 1.14 million bpd for April loading, the highest since September 2014. They have been ticking higher since the beginning of the year.
“Structurally, (demand) is high, and it's driven by the teapots," said Michal Meidan, Asia analyst with Energy Aspects.
Teapot refineries, which only recently received licences to import oil, are highly coveted by crude producers and traders seeking to secure buyers in a fundamentally oversupplied market. Meidan estimated that teapot import licenses would add 800,000 to 1.2 million bpd on average to China's overall crude imports compared with the previous year.
Earlier this month, Norwegian oil company Statoil offered three supertankers with six million barrels of West African oil on a delivered basis to the Chinese port of Qingdao in a bid for their business.
As of Thursday, it had sold at least four million of the barrels, including Angola's Saturno, Pazflor and Dalia, to teapot refiner Dongming Petrochemical, according to traders. Dongming is leading a consortium of 16 teapot refineries in an alliance to improve their negotiating stance as crude buyers.
The crude on one of the vessels had yet to sell, traders said, so China's total imports from April loadings could easily edge higher.
Other Asian countries' bookings for April-loading West African oil were largely flat, with India taking one less cargo compared with March and Indonesia and Taiwan booking the same number as the month earlier.
One cargo of Bonny Light had been provisionally booked to sail to Australia, and the same grade was set to ship to South Korea for refiner GS Caltex.