China Switch to African Oil puts Pressure on Saudi Crude

Weakness in global oil benchmark Brent has prompted China to buy more crude from Africa. The question now is how will top exporters Saudi Arabia and Russia respond to the shifting dynamics?

Chinese imports from Africa are expected to jump to 6.51 million tonnes (47.5 million barrels) in July, up about 41 percent from June, according to data compiled by Thomson Reuters Oil Research and Forecasts.

The bulk of the increase will come from Angola, China’s top supplier in Africa, which is expected to ship 3.4 million tonnes in July, up from 2.88 million in June, the forecast team said.

Also gaining are cargoes from South Sudan, with eight exported to China in July for a total 767,000 tonnes, an increase of 8 percent from June.

For the Angolans, the large boost in July exports to China will be a welcome change, as they lost their number two spot behind Saudi Arabia in the first six months of 2015 to Russia, according to Chinese customs data.

China imported 19.011 million tonnes from Angola in the first half of 2015, a drop of 8.7 percent from the same period last year.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza