TRADE INTERNATIONAL ENERGY AGENCY - MONTHLY OIL MARKET REPORT

TRADE
North American stocks of gasoline have been low and their prices, relative to those of crude, high,
attracting unusually high imports of gasoline, blendstocks and gasoline-rich crudes. US imports of
both crude and products are running significantly higher than a year ago, at levels usually reached
closer to the summer driving season. The higher imports may also reflect a market that is somewhat
better supplied because global demand is weakening.

West African Crude Trade

North American imports of gasoline-rich West African crude increased by 320 kb/d from January to
1.77 mb/d in February. This North American increase came at the expense of Europe, where refiners’
interest in this light, sweet crude has cooled along with heating oil demand. Crude price differentials
support this theory; heating-oil-rich Forcados’ discount to dated Brent doubled between February and
March, with April’s discount midway between the two.

Financial Indicators: Refinery Margins

m b/d
OECD Imports of West African Crude $/bbl
8
2.5

6
2.0

4
1.5
2

1.0
0

0.5
-2

0.0 -4
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01
OECD Europe OECD Pacific
NWE Hydroskimming
OECD North America Singapore Hydroskimming
USG Cracking (Brent)

OECD Pacific did not import any West African crude in February. Both China and India also cut
back sharply their imports of West African crude in February. This suggests that West African crude
remained uncompetitively priced for Asian destinations in February. Brent’s price premium to Dubai
was wide at $2.80 in January and $2.65 in February, and West African crude is priced off dated Brent.
Asian demand has also been weaker than anticipated, particularly in India. Asian refinery runs
declining seasonally in May and June typically free up additional volumes for North America.

North Sea Trade

Total exports of North Sea crude receded 15% from their January near-record peak of 5.4 mb/d to a
more-normal 4.6 mb/d. This echoes the pattern seen last year. February exports were limited by
North Sea production of only 6.2 mb/d, 275 kb/d lower than in January, with losses primarily at the
Forties and Haltenbanken fields. Exports are likely to have been more nearly normal in March, when
production increased 190 kb/d from February. Field maintenance scheduled for April and May will
mean successive losses of 115 and 185 kb/d respectively.

With supply short and Louisiana Light Sweet selling for only about $2 more than dated Brent, just
enough to cover freight on a Very Large Crude Carrier to the US Gulf Coast, the North Sea surplus
exported to North America shrank by 290 kb/d or 22% between January and February. Deliveries to
the Gulf Coast deliveries slowed or stopped, while shipments to Eastern Canada and the Northeast US
remained economic. But with European refining margins recovering and the price premium of US
domestic crudes to Brent shrinking to just $1.40 in April, the arbitrage window for transatlantic sales

22 11 MAY 2001
INTERNATIONAL ENERGY AGENCY - MONTHLY OIL MARKET REPORT TRADE

of Brent closed in April. North Sea exports to North America may not ramp up in earnest until June,
when Brent’s higher heating oil yield again looks interesting.

North Sea Crude Exports by Market $/bbl Financial Indicators

m b/d

4.5 4

4.0
3
3.5
2
3.0

2.5 1

2.0 0

1.5
-1
1.0
-2
0.5

0.0 -3
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01
NWE Hydroskimming
Europe Asia/Pacific North America
LLS minus Dated Brent

Saudi Crude Trade

Saudi crude production, including Saudi Arabia’s half share in the Neutral Zone, totalled 8.6 mb/d in
January and 8.2 mb/d in February. After deducting domestic requirements of 1.6-1.8 mb/d, about
7 mb/d remained for export in January and at least 6.4 mb/d in February. In an average month, about
1.7 mb/d of Saudi crude goes to non-OECD destinations: 0.1 mb/d to Latin America, 0.3 mb/d to
Africa and 1.3 mb/d to Asia. Singapore accounts for 300-600 kb/d of Saudi crude sales, India for
300 kb/d, Taiwan for 200 kb/d, China and Pakistan about 150 kb/d each, and Malaysia 50 kb/d.
In February, this left 5.2 mb/d to be imported by OECD countries, making Saudi Arabia the largest
supplier. As Table 10 shows, Saudi crude recently represented one barrel of every six imported into
Europe, and one of every four in Japan and North America. Saudi price formulas that vary by
destination have decreased the volume of Saudi crude marketed in Europe and they have increased the
Saudi market share in North America. European refiners bore the brunt of Saudi Arabia’s production
cutbacks in 1998 and 1999, although exports to Japan also fell.
The grades favoured by each region vary widely, depending on the sophistication of their refinery
configurations. The more complex the refinery, the heavier and more sour the crude it can process.
Table 11 and the graphs overleaf show regional imports of Saudi crude by grade for countries which
submitted their Crude Oil Import Registers to the IEA. These do not include Korean imports of Saudi
crude averaging about 800 kb/d, as Korea joined the IEA in April 2001. Nevertheless, the trends
shown here are broadly representative of the regions as a whole.

Both Asia/Pacific and European imports of Saudi crude are predominantly the lighter grades, which
compete with North Sea crude. Many of the refineries in these regions lack coking capacity, and so
the volume of heavy crude they run is relatively limited. North American imports from Saudi Arabia
tend to be of medium crude even though US refineries are more sophisticated. Canada, Mexico and
Venezuela also produce heavy crude oil and are much closer to North American markets. The latter
two countries pre-empted Saudi Arabia with respect to quite a few refineries, making joint venture
refinery deals linked to long-term supply contracts.

11 MAY 2001 23
TRADE INTERNATIONAL ENERGY AGENCY - MONTHLY OIL MARKET REPORT

IEA Imports of IEA Imports of Saudi Medium

m b/d Saudi Light & Extra Light m b/d
3.0 1.5

2.5

2.0 1.0

1.5

1.0 0.5

0.5

0.0 0.0
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01

North America Europe Pacific North America Europe Pacific

IEA Imports of Saudi Heavy IEA North America

m b/d m b/d Imports of Saudi Crudes
1.00 2.5

2.0
0.75

1.5
0.50
1.0

0.25
0.5

0.00 0.0
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01

Saudi Light & Extra Light Saudi Medium

North America Europe Pacific
Saudi Heavy

IEA Europe Imports of Saudi Crudes IEA Pacific Imports of Saudi Crudes
m b/d m b/d

2.5 1.5

2.0

1.0
1.5

1.0
0.5

0.5

0.0 0.0
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01

Saudi Light & Extra Light Saudi Medium Saudi Light & Extra Light Saudi Medium
Saudi Heavy Saudi Heavy

24 11 MAY 2001
INTERNATIONAL ENERGY AGENCY - MONTHLY OIL MARKET REPORT TRADE

OECD Pacific
The trade tables appended to this Report show gross imports of crude and of four major products.
Table 10 reports the Pacific’s imports by region, but overstates the crude requirement slightly because
it misses Australia’s crude exports to Singapore and other non-OECD Asian countries. These
currently are 150-200 kb/d, with about half going to Singapore.
The table below reports net imports, and adds two key products in the Pacific: LPG and naphtha. Net
imports of both have plunged recently, suggesting a slowdown in Asian petrochemicals demand
accompanying weaker economic fundamentals.
OECD Pacific relies on imports to OECD Pacific Crude & Product Trade
meet 45% of its naphtha demand and (million barrels per day)
60% of its LPG/ethane requirements, kb/d Latest Month vs
with supply coming mostly from the Feb 01 Jan 01 Feb 00 Jan 01 Feb 00
Middle East. February saw LPG
imports of only 185 kb/d from Saudi Net Imports of
Arabia, down sharply from 270 kb/d Crude Oil 7.68 7.49 7.12 0.19 0.56
in the previous month, 145 kb/d from Products & Feedstocks 0.74 0.92 1.14 -0.18 -0.40
the United Arab Emirates and a Gasoil -0.21 -0.22 -0.26 0.01 0.05
combined 60 kb/d from Qatar, Kuwait Gasoline -0.03 0.00 -0.03 -0.03 0.00
and Iran. OECD Pacific’s exports of Fuel Oil -0.18 -0.21 -0.10 0.03 -0.07
LPG are minor, offsetting imports LPG 0.39 0.50 0.61 -0.11 -0.22
from Asia. Naphtha 0.48 0.65 0.68 -0.17 -0.21
Jet & Kerosene 0.16 0.05 0.04 0.10 0.12
Net naphtha imports stood at an Other 0.15 0.16 0.21 -0.01 -0.06
average 660 kb/d last year and Total 8.42 8.42 8.26 0.01 0.16
700 kb/d as recently as the fourth Source: IEA MOS imports and exports data
quarter of 2000. However,
preliminary statistics show a collapse in February to only 480 kb/d. If confirmed, this too would raise
questions about the health of the petrochemicals industry, but February naphtha is considered as a
data anomaly. January showed net imports of 40 kb/d from Singapore, 180 kb/d from other Asian
refining centres outside the OECD, and 415 kb/d from the Middle East. The United Arab Emirates
supplied the largest volume, of 180 kb/d, followed by Saudi Arabia with 100 kb/d and Kuwait at
90 kb/d. Bahrain and Qatar supplied the balance.
Korea alone is responsible for 80% of the gasoil exports shown in the table above. India has not been
a customer since March of last year, but countries such as Indonesia, Vietnam and Singapore have
replaced it.

OECD Product Trade

North American, and specifically US East Coast, gasoline is leading the market. North American
imports of finished motor gasoline from Europe spiked in January and hit 320 kb/d in February. If
additives and aviation gasoline are included, as in Table 12a, the total rises to 340 kb/d.
From February through April, the financial indicators show the US and Northwest Europe in a
bidding war over gasoline, with New York prices moving up sharply to attract imports away from a
Europe trying hard to hold on to its own supply. The problem seems to be centred on New York
Harbour, with the US Department of Energy’s statistics showing gasoline stocks in the Middle
Atlantic states 15% lower than a year earlier at end-April. Refinery problems in Venezuela, Aruba,
Belgium, the UK and the US have tightened Atlantic basin supply and so raised the price of gasoline
relative to that of crude. One well-placed industry source says that Europe’s once-chronic refining
overcapacity is over, mopped up by US shortages of light products. That may overstate the case, but
net exports of gasoline from OECD Europe reached 350 kb/d in November of last year and 435 kb/d
this January. Even with refineries running hard enough to produce gasoline surpluses this large,
OECD Europe imported a net 130 kb/d of jet and kerosene, 165 kb/d of naphtha, 190 kb/d of LPG and
230 kb/d of gasoil.

11 MAY 2001 25
TRADE INTERNATIONAL ENERGY AGENCY - MONTHLY OIL MARKET REPORT

Gasoline Trade Flows $/bbl Financial Indicators: Gasoline

kb/d betw een OECD North America & Europe
20
400

15
300

10

200
5

100
0

0
-5
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01
Europe to OECD North America NWE FOB barge differential to crude
OECD North America to Europe NYH barge differential to crude
arbitrage: NYH minus NWE

Preliminary statistics from the US EIA for the first four weeks of April show US imports of finished
motor gasoline and gasoline blendstocks to be 123 kb/d higher (about 20%) than their equivalents a
year earlier, with 115 kb/d of the increase in blending components. Motor gasoline blendstocks now
represent nearly half of all US “gasoline” imports. With product specifications and refining capability
so very disparate from one region to another, blendstocks bridge the gaps.
North American gasoil imports remained extremely strong, at 490 kb/d in February, 180 kb/d or
60% higher than a year earlier. Gasoil imports have been bolstered by widespread substitution of
gasoil for expensive natural gas, with 90 kb/d of the increase coming from Central and South
America. Although the flows from Asia to the West Coast slowed in February, despite a slight
widening in the arbitrage to $7.50, imports from Asia were still extremely high, at nearly three times
those a year earlier. The arbitrage between Singapore and Los Angeles went sideways in March but
subsided to $4.45 by April, suggesting a fall-back in Asian imports to 10-20 kb/d.

Gasoil Trade Flows $/bbl Financial Indicators: Gasoil

kb/d betw een OECD North America & Asia/Pacific
20
100

15

75
10

50
5

25 0

0 -5
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01
Singapore differential to crude
Asia/Pacific to OECD North America
L.A. differential to crude
OECD North America to Asia/Pacific arbitrage: USWC minus Singapore

North American call on imports of jet kerosene from Asia remained extremely strong in February at
80 kb/d, double its level a year earlier. Jet price differentials to crude have grown extremely wide in
refining centres globally, but the situation is particularly acute on the West Coast where imports

26 11 MAY 2001
 INTERNATIONAL ENERGY AGENCY - MONTHLY OIL MARKET REPORT TRADE

represented 15% of total jet supply. The switch to cleaner on-road diesel has reduced West Coast jet
supply. Part of the loss occurs in the refining process itself, and part occurs when cleaner kerosene is
blended into off-specification diesel to reduce its sulphur level. With imports a necessity, Singapore
jet differentials have been pulled by the West Coast. But progressive easing of jet’s relative West
Coast price in March and April despite problems at Tosco’s Carson refinery suggest that the supply
crisis may be over.

Jet Kerosene Trade Flows $/bbl Financial Indicators: Jet Kerosene

kb/d betw een OECD North America & Asia/Pacific
15
125

100 10

75
5

50

0
25

0 -5
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01
Asia/Pacific to OECD North America Singapore differential to crude
OECD North America to Asia/Pacific USWC differential to crude
arbitrage: USWC minus Singapore

North American natural gas prices were easing in February but they were still high enough to
encourage utility burning and stockbuilding of residual fuel oil. The region’s fuel oil imports dropped
to 400 kb/d in February, still double those of a year earlier. Imports from nearby Central and South
America dropped 110 kb/d, while Europe’s 65 kb/d gain meant an equal loss to the Middle East and
Africa, primarily Algeria. The motivating factor seems to be fuel oil surpluses in the Mediterranean,
aggravated by increasing FSU exports of fuel oil to Europe, which hit 250 kb/d in February.
Preliminary statistics for March and April show US fuel oil imports slightly less strong in March and
April, with year-on-year increases of 130-140 kb/d.

Heavy Fuel Oil Trade Flows Financial Indicators: Fuel Oil

kb/d betw een OECD North America & Europe $/b b l

175 5

150

125
0
100

75
-5
50

25

0 -10
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01
Europe to OECD North America NWE FOB barge differential to crude
NYH barge differential to crude
OECD North America to Europe
arbitrage: NYH minus NWE

11 MAY 2001 27
TRADE INTERNATIONAL ENERGY AGENCY - MONTHLY OIL MARKET REPORT

Freight
Spot charter rates for crude tankers moved in disparate directions during April. Rates for Very Large
Crude Carriers from Saudi Arabia to Japan continued to soften with OPEC production cutbacks,
subsiding to rates not seen since early April of last year. VLCC rates have been extremely volatile of
late, with market sentiment exaggerating the price moves that accompany tight tonnage. In contrast,
the cost of moving a cargo of Brent crude oil to Antwerp moved sideways, as did that of moving
Bonny Light to Philadelphia. Rates for smaller tankers have been relatively free of the price spikes
experienced in the markets for larger ships.

Weekly Crude Oil Tanker Voyage Freight Rates

US$ per Tonne

20

15

10

0
Jan-99 Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01
80,000 North Sea-NW Europe 130,000 W.Africa-USAC VLCC ME Gulf-Japan
Source: SSY Consultancy & Research Ltd.

Rates in the clean product tanker trades have followed the same general pattern as those for crude.
Persistent overcapacity from the last cycle of tanker over-building kept rates soft through the end of
1999. But as product stocks were drawn down over the course of last year, prompt supply became
ever more urgent and rates moved up strongly as 2000 progressed. When demand for product cargoes
subsided from its mid-winter peaks, rates for product tankers collapsed.

Weekly Product Tanker Voyage Freight Rates

US$ per Tonne
50

40

30

20

10

0
Jan-99 Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01
30,000 Caribb-USAC 60,000 NW Europe-USAC 75,000 Middle East-Japan
Source: SSY Consultancy & Research Ltd.

Tanker rates are likely to firm up from the third quarter on, when demand and refinery runs rise
seasonally. Age and increasing quality standards are effectively shrinking the usable fleet, and
relatively little new tonnage will be added. Although the International Maritime Organisation

28 11 MAY 2001
INTERNATIONAL ENERGY AGENCY - MONTHLY OIL MARKET REPORT TRADE

accelerated the schedule for phasing out single-hulled ships, its new deadline is not until 2015. In the
meantime, companies are “whitelisting” the best quality, most modern ships, a process that is creating
a two-tiered freight market. Two Nordic companies recently announced they will use only
double-hulled or double-bottomed tankers for fuel oil. Italy threatened to ban single-hulled ships
from key Italian ports beginning 23 April, but on 4 May set the deadlines at January 2004 for crude
carriers and the end of 2005 for product carriers.

Trade in the FSU, China and India

Preliminary statistics show net crude and product exports from the Former Soviet Union totalling
4.53 mb/d in April. This figure is 230 kb/d higher than the upwardly-revised figures for a year
earlier, with about all the increase in exports shipped via the Black Sea. Seaborne exports most
recently peaked at 3.6 mb/d in July of last year, but touched 4 mb/d in the third week of this April.
FSU net exports would have been significantly higher than 4.54 mb/d had not bad weather in the
fourth week limited loadings at the main export terminal, Novorossiysk.
Net FSU Exports
(million barrels per day)
r p
2000 2Q00 3Q00 4Q00 1Q01 Jan 00 Feb 01 Mar 01 Apr 01
1
Black Sea Exports 1.80 1.84 1.95 1.78 1.80 1.82 1.70 1.87 2.06
Baltic Sea Exports 1.37 1.51 1.42 1.19 1.33 1.22 1.34 1.43 1.40
Total Seaborne 3.18 3.35 3.37 2.96 3.13 3.04 3.05 3.30 3.45
2
Druzhba Pipeline 1.03 1.01 1.01 1.07 1.10 1.11 1.12 1.07 1.07
Other 0.11 0.09 0.17 0.13 0.04 0.04 0.05 0.01 0.01
Total Exports 4.32 4.45 4.55 4.17 4.26 4.19 4.22 4.38 4.54
Imports 0.02 0.01 0.01 0.05 0.01 0.02 0.01 0.00 0.01
Net FSU Exports 4.29 4.45 4.53 4.11 4.25 4.17 4.20 4.38 4.53
NB: Crude 3.06 3.07 3.10 3.12 3.12 3.16 3.03 3.16 3.28
Products 1.23 1.38 1.44 1.00 1.14 1.01 1.18 1.22 1.26
1 Includes a small amount of non-Russian crude oil exports 2 crude oil only
r revised p preliminary

About 20% of Black Sea exports and 65% of Baltic exports are of petroleum products, with the
balance crude oil. April’s product exports included an estimated 640 kb/d of fuel oil, 510 kb/d of
gasoil and 110 kb/d of “other products” including kerosene and gasoline blendstocks. In May, fuel oil
exports are likely to increase, in part seasonally and in part due to Russia’s scheduled mid-May
reduction in export tariff.
Although the medium-term trend is for ever-increasing exports from the FSU as production and
export capacity increase, Russia’s Deputy Prime Minister and head of the Commission on Oil and Gas
Pipeline Use, Victor Khristenko, has recently slowed its rate. Although the second quarter export
schedule was eventually increased over Khristenko’s initial protest, “temporary exports” of crude (in
theory, exchanged for products) were made illegal, extra export allocations for independent producers
were put on hold, and transfers of company
rights to export were restricted. Khristenko has China - Crude Oil and Product Trade
proposed reducing the gains from (thousand barrels per day)
underestimating production (and exporting kb/d Latest Month vs
subsequent “overproduction”) by requiring Feb 01 Jan 01 Feb 01 Jan 01 Feb 00
companies to bid at auction for extra space in
Crude Imports 1358 875 1469 483 -111
export pipelines.
Crude Exports 278 156 215 121 63
Net Crude Imports 1081 718 1254 362 -174
Chinese refinery runs rebounded to 3.9 mb/d in
February, 480 kb/d higher than in January and Total Net Imports 1378 1037 1491 341 -113
350 kb/d higher than a year earlier. While crude Net Product Imports
imports increased between January and
LPG 91 122 170 -31 -80
February by as much as refinery runs did, crude
Naphtha -63 -13 2 -50 -65
imports are significantly lower than last year.
Gasoline -24 -92 -101 69 77
February’s crude imports consisted of 870 kb/d
Kerosene 18 38 -17 -20 35
Middle East crude, 120 kb/d West African and
Diesel -2 3 2 -5 -4
130 kb/d other African crude, 190 kb/d
RFO 295 273 163 22 132
Asia/Pacific crude and 45 kb/d from the FSU.
Other Products -18 -12 18 -5 -35
Middle East producers supplied two-thirds of
the increase since January, with crude imports Total Products 297 318 237 -21 61

11 MAY 2001 29
TRADE INTERNATIONAL ENERGY AGENCY - MONTHLY OIL MARKET REPORT

from Iran, Iraq and Oman each rising about 100 kb/d. China’s crude exports also rose, with exports to
Japan rising from 60 kb/d in January to 155 kb/d in February. The interest of Japanese electric
utilities in Chinese crude that may be burned directly was magnified by the disruption of LNG supply
from Indonesia’s Arun field.
Net Chinese product imports remained relatively steady in February at about the average prevailing
last year. Refinery investment to increase the yields of light products such as diesel, naphtha and LPG
at the expense of fuel oil are primarily responsible for strong imports of fuel oil, the demand for which
has been relatively flat so far this year. Fuel oil yield dropped from 20% in 1994 to just 8% last year.
Indian refinery runs recovered to 2.24 mb/d in February and to 2.26 mb/d in March. Utilisation rates
for both months averaged 99% of capacity, after languishing near 90% for November through
January. Three successive months of restrained refinery runs apparently have reduced product
oversupply somewhat. April and May runs are likely to be 100-300 kb/d lower, cut for
seasonally-lower naphtha demand.
Crude import figures are available only for India - Crude Oil and Product Trade
Indian Oil Corporation, which once had a (thousand barrels per day)
monopoly on crude imports to India kb/d Latest Month vs
irrespective of the refinery for which the Mar 01 Feb 01 Mar 00 Feb 01 Mar 00
crude was destined. However, the missing
Crude Imports* 798 710 696 87 102
figures were immaterial until privately-held
Reliance refinery started up, and now appear Crude Exports 0 0 0 0 0
to total roughly 400 kb/d. The bulk of the Net Crude Imports 798 710 696 87 102
unreported crude is for Reliance, but also Product Imports 222 222 396 0 -173
includes crude imported by Caltex for Product Exports 7 8 0 -1 7
Mangalore Refinery and Petrochemicals, a Net Product Imports 215 214 396 1 -181
joint venture. That gap will widen. Reliance Total Net Imports* 1013 925 1092 88 -78
is planning further expansions, and the right Net Product Imports
to import crude directly is being extended to Gasoil 0 0 81 0 -81
publicly-held ventures such as Hindustan Gasoline 0 0 0 0 0
Petroleum Corporation and Bharat Fuel Oil 24 24 38 0 -14
Petroleum Corporation. LPG 26 31 41 -5 -15
Naphtha 79 63 72 16 7
Kerosene 54 26 118 28 -65
IOC’s imports of crude oil fell by 214 kb/d Other 8 9 8 -1 0
between January and February despite an Total 190 152 357 38 -168
increase of 158 kb/d in runs at the refineries
Source: Indian Ministry of Commerce, Indian Port Authorities and IEA estimates
IOC supplies. From there, imports kept pace * excluding private imports of crude, for which figures are unavailable.
with runs in March. The widened gap
between crude supply and refinery runs implies that IOC is or soon will be handling a progressively
smaller proportion of crude imports, and may be reducing its stocks in preparation.

Middle East producers came closest to maintaining their sales in February, with a total 480 kb/d in
roughly equal measure from Saudi Arabia, the UAE, Iran and Kuwait. This was only 113 kb/d lower
than January, with the bulk of the loss falling to Kuwait. Kuwaiti imports dropped 85 kb/d. Nigeria’s
losses were the sharpest, falling by a third from January to just 200 kb/d. Sweet Nigerian crude helps
India’s refineries respect the country’s limits on sulphur in gasoil, but the absolute volume required is
lower with the local demand for high-speed diesel so weak.
In March, India’s crude imports rebounded, with gains by sour Middle East crudes. Imports of
Nigerian crude dropped again, to 157 kb/d, displaced by 60 kb/d Iraqi Basrah Light and 30 kb/d
Yemeni Masila crude.
Net Indian imports of petroleum products increased 25 kb/d between January and February-March,
essentially all LPG. This reflects higher government imports of LPG to offset output losses at
Reliance’s Jamnagar refinery in the wake of the Gujarat earthquake, which shut down its fluid
catalytic cracker for a month. However, press reports suggest that the Government’s imports of LPG
and kerosene may soon be discontinued because demand is lower than anticipated. Kerosene demand
is stagnant, LPG demand growth has been slowing, and domestic refinery production is up
substantially, although lagging behind state planning targets.

30 11 MAY 2001