Iran Super Thread- Merged

[Altair]

China learns to live on less fuel, to the relief of oil markets

Three months into the Iran war, the oil market is coming to grips with an unexpected new reality: China, the world's largest importer, needs much less fuel than previously thought.

www.reuters.com

China learns to live on less fuel, to the relief of oil markets​

SINGAPORE/BEIJING, June 11 (Reuters) - Three months into the Iran war, the oil market is coming to grips with an unexpected new reality: China, the world's largest importer, needs much less fuel than previously thought.
Gasoline sales at Sinopec (600028.SS), opens new tab, ‌which runs China's biggest network of petrol stations and is the world's largest refiner, dropped 8% on-year in April while diesel fell 6%, according to industry sources briefed on internal data.



Fuel use in China had already been falling in recent years due to slowing economic growth and the rise of electric cars and trucks, but the recent decline is especially steep and has caught industry players by surprise.

Goldman Sachs estimates the drop in the use of gasoline and related products was about 20% in April, while China-based GL Consulting put the decline at around 15%.
Unlike during the pandemic, it is not that Chinese are moving around less. Instead, they are changing the way they travel: rail journeys grew around 10% in March and April annually, compared to around 5% last year, according to Ministry of Transport ⁠data. Travel by subway or taxis, which are electrified in many cities, is also growing rapidly, the data shows.

China's EV fleet, by far the world's largest, also got more use in April. Charging rose 69% from a year earlier to an all-time high, according to the state-backed China Charging Alliance.

Redirect Notice

China's crude oil imports crashed to a decade-low in June as the reduced flows through the Strait of Hormuz hiked oil prices and reduced refiners' appetite for costly crude.

Overall Chinese imports of crude oil plunged by 41.3% in June from a year earlier, to just 29.27 million tons, or 7.12 million barrels per day (bpd), according to official Chinese customs data released on Tuesday.

The June volumes hit a decade low as they were at their lowest level since October 2016, according to the data series.

Chinese crude oil imports extended the decline from May, falling by another 12% in June from the prior month.

Imports in May had crashed to an eight-year low, and further slid in June to a decade-low.


Refinery runs also crashed in May to a four-year low, as Chinese crude processors curbed run rates amid high feedstock prices and export restrictions on fuels.

Run rates further slipped in June, to an estimated 57.72% last month, down 3.28 percentage points from May, according to data by China-based consultancy Oilchem cited by Reuters.

China's huge stockpiles amassed before the Iran war began and its ability to curtail imports during the first four months of the conflict have kept oil prices from spiking to record highs despite the loss of more than 10 million bpd of daily flows through Hormuz.

China is the world's top crude importer, but it was also the importer best prepared to weather a global supply crisis. In the year before the Iran war started, China is estimated to have amassed between 1.2 billion and 1.3 billion barrels of oil in commercial and strategic reserves. These could be even higher as the inventories are a closely guarded secret, as are China's imminent plans about stockpiling or drawing down reserves.

And as per usual, the biggest winners in the imminent oil crash and this USA Iran conflict....China.

 

[Altair]

US Crude Oil, Gasoline Inventories Still Falling | OilPrice.com

The American Petroleum Institute (API) estimated that crude oil inventories in the United States fell by 564,000 barrels in the week ending July 10

oilprice.com

The American Petroleum Institute (API) estimated that crude oil inventories in the United States fell by 564,000 barrels in the week ending July 10. In the week prior, US crude oil inventories fell by 399,000 barrels.

Although commercial crude oil inventories excluding the SPR have been falling rapidly for three months now, shedding just over 60 million barrels over the last twelve weeks, US crude inventories are only down 9.2 million barrels so far this year, according to API data, kept in check by draws from the SPR.

America on the other hand...

 

[suffolkowner]

I’m not missing that point. I’ve specifically said that I think we’ll keep seeking an escalatory and deescalatory cycle specifically because both countries have the ability to cause great economic destruction, but also that it’s mutually assured.

However, I think Iran can afford to drag it out longer and push things a bit farther, because their government is more politically resilient in the short term. Iran isn’t four months away from a midterm election that the ruling regime is probably increasingly afraid of.

What I’ve actually been saying is no more than what I’ve actually been saying: Iran can keep the Strait commercially closed due to the realities of maritime insurance. They can and will co to use to leverage this to get concessions from Trump; Trump has already shown thee weakness of his hand in this respect.

American can and will keep bombing within the same general target set. But doing that for months hasn’t worked… But if they start, say, going after energy facilities, then Iran will do that right back.a lot of people who have spent years describing Iran as crazy and evil seem suddenly reticent to believe Iran, backed into a corner, would embrace being even more crazy and evil.

So…The U.S. is in a pickle, and there’s not an obvious way to just bomb the shit out of the dilemma. Iran also needs to not overplay its hand.

Sadly this all leaves a lot of room for things to continue to badly suck.

China learns to live on less fuel, to the relief of oil markets

Three months into the Iran war, the oil market is coming to grips with an unexpected new reality: China, the world's largest importer, needs much less fuel than previously thought.

www.reuters.com

Redirect Notice

And as per usual, the biggest winners in the imminent oil crash and this USA Iran conflict....China.

add in lots of sales of PV, batteries and Evs

 

[Altair]

add in lots of sales of PV, batteries and Evs

100 percent. China is very nimble economically and will simply shift to more EVs in the face of rising oil prices, drawing down consumption and protecting their oil reserves.

And the rest of the world, chocking on high fuel prices will want what? Probably more Chinese EVs.

Again, from a strategic point of view, this entire war is a massive own goal for the USA.

America: Don't buy Chinese EVs

World: Okay.....

America: Starts a war to drive up global oil prices and introduce fuel scarcity

World: Hey, not cool, we cannot afford this

America: Get bent

China: Hey, we have cheap EVs and then you don't need to be so reliant on oil

World: Sounds great

America: DONT BUY CHINESE EVs!!!

Just unreal how poorly this is all going.