The first tankers laden with the newest crude blend to emerge from the Straits of Malacca have arrived in China to discharge 190,000 mt (1.4 million bbls) of the Singma grade, according to a shipping report and IHS Markit's ship tracker Market Intelligence Network (MINT).
The Suezmax Samsara is due to off-load 140,000 mt of Singma in Qingdao, the report showed. The tanker was scheduled to arrive on Aug. 27. A second tanker, the Tahiti, was due to discharge 50,000 mt of the same blend on Aug. 31 at the same port.
MINT data show both the Samsara and Tahiti anchored outside Qingdao port.
The Samsara had undertaken a ship-to-ship (STS) transfer in the Straits of Malacca with the very large crude carrier (VLCC) Respect on Aug. 18 in an exercise that lasted 32 hours, according to MINT.
The Respect had also had also carried out STS activities with two other vessels, the Tahiti and the bulk carrier Sweet Melissa.
The Respect called at the Venezuelan Jose Terminal prior to setting off for the Straits of Malacca, departing the Caribbean on July 1, according to MINT.
These crudes that emerge from the Straits of Malacca blending pool include grades from West Africa, contaminated Urals, sanctioned oil from Venezuela and Iran plus mainstay grades from the Middle East, market sources said.
The transshipments through ship-to-ship (STS) transfers, involving multiple loadings and discharges on board ultra and very large crude carriers (ULCCs and VLCCs) help mask the origin of the crude to create a new blend that is then sold overseas, especially to thirsty independent refiners in China.
U.S. sanctions against Venezuela and Iran make it near impossible for anyone on the oil supply chain, i.e. from shipowners to traders to financiers, to handle cargoes from these two countries without incurring penalties from Washington.
It is no longer a simple case of re-documenting the origin of crude oil cargoes as current technology makes it difficult to get away with such forged documents, thus leading to the creation of these exotic blends in recent months, market sources said.
Nemina blend, which did not exist in global crude oil circles until late last year, is one of the largest grades to be shipped to China from Malaysia with one Aframax cargo each (about 700,000 bbls) in May and June, according to data from IHS Markit’s Commodities At Sea (CAS).
The cargoes originated from the Sungai Linggi Transshipment Area, a well-known and active STS zone in the Straits of Malacca, CAS data showed.
According to Chinese customs data, the nation imported 325,000 b/d (9.75 million bbls) of crude oil from Malaysia in May, which was a record, and almost matched in July with purchases totaling 315,000 b/d.
Just over 8 million barrels are due to arrive in September from Malaysia of unknown crude grades, according to CAS data.
CAS data show that unlike exports to countries such as India, Thailand, Indonesia, Singapore and Australia where mainstay Malaysian crude grades such as Kimanis, Labuan, Miri and Bintulu dominate, recent shipments to China do not include any of these grades.
Nemina shows up as the largest grade sold to China in the past year and there no descriptions for the other volumes sold, according to CAS data.
Ship tracking services struggle to keep track of the cargoes delivered due to these multiple STS activities and consequently rely on customs declarations for the identity of the crude.
For example, according to port agent reports the Suezmax Patroclus discharging 150,000 mt of crude labeled as Mal Blend at Qingdao port in China in mid-August.
Another report showed that the Suezmax Xin Hui Yang, which was in the Sungai Linggi trans-shipment area for about five days, was the most recent vessel to discharge a parcel of Nemina crude to China in end June. It unloaded about 127,000 mt at Qingdao.
-- Raj Rajendran, (Rajendran.Ramasamy@ihsmarkit.com)
Copyright, Oil Price Information Service
