Oil carriers are waiting up to 10 days in Chinese ports as the nation seeks alternatives to Iranian crude.
China has been scouring the globe to replace deliveries of Iranian oil, which have fallen to their lowest level since 2010. Imports from Venezuela more than doubled from a year earlier, as deliveries from Angola climbed 25%. The cost to ship oil from the Middle East to Asia, the biggest Very Large Crude Carrier (VLCC) trade route, rose 29% since the start of the year, meaning daily earnings on the route advanced 90% to $39,532.
However, VLCCs coming from further and further afield have resulted in severe delays across the nations ports. According to Ody Valastas of Dyancom Tankers Management Ltd, the 2 million-barrel-hauling VLCCs are waiting as long as 10 days to discharge, compared to around 2 days under normal conditions.
The nation aims to more than double its strategic reserve capacity and imported a record 70.5 million metric tons of crude in the first quarter this year. China’s plan to secure future energy usage by increasing strategic reserves has put massive demand pressure on global oil suppliers, which in turn continues to push up oil prices.