.Saudis quit Caribbean oil storage, China steps in
Saudi Arabia has quit a long-held lease for five million barrels of Caribbean oil storage near the key U.S. market and state giant PetroChina Co. Ltd. is poised to move in, industry sources say, a potentially major shift in global oil trade dynamics.
Coming just weeks after Saudi Oil Minister Ali al-Naimi revealed the world's top oil exporter accepted an offer for free storage in Japan, the news underscores the growing importance of China and Asia as against the United States, where the government says oil demand has already peaked and supply competition from nearby Brazil and Canada is expanding.
It also highlights the increasingly global reach of China's biggest state oil company, which could use the facilities as a staging point for a growing slate of South American oil deals or as trading leverage in the U.S. market, which still effectively sets the global price of oil.
Beyond the economic logic, the move has geopolitical implications, relocating a small but important part of Saudi Arabia's tools to provide energy security to top markets.
Three sources familiar with Saudi operations at the terminal told Reuters state oil company Saudi Aramco ended its arrangement to lease at the 13 million-barrel Statia Terminals on the island of St. Eustatius. The five-million-barrel lease, regularly renewed by an Aramco subsidiary since 1995, formally ends on Dec. 31, one of the sources said.
"Aramco dropped out of storage recently, having discussed it for quite some time," a source familiar with Saudi Aramco's positions in the Caribbean said.
The Globe and Mail
Coming just weeks after Saudi Oil Minister Ali al-Naimi revealed the world's top oil exporter accepted an offer for free storage in Japan, the news underscores the growing importance of China and Asia as against the United States, where the government says oil demand has already peaked and supply competition from nearby Brazil and Canada is expanding.
It also highlights the increasingly global reach of China's biggest state oil company, which could use the facilities as a staging point for a growing slate of South American oil deals or as trading leverage in the U.S. market, which still effectively sets the global price of oil.
Beyond the economic logic, the move has geopolitical implications, relocating a small but important part of Saudi Arabia's tools to provide energy security to top markets.
Three sources familiar with Saudi operations at the terminal told Reuters state oil company Saudi Aramco ended its arrangement to lease at the 13 million-barrel Statia Terminals on the island of St. Eustatius. The five-million-barrel lease, regularly renewed by an Aramco subsidiary since 1995, formally ends on Dec. 31, one of the sources said.
"Aramco dropped out of storage recently, having discussed it for quite some time," a source familiar with Saudi Aramco's positions in the Caribbean said.
The Globe and Mail
posted by madtom at 5:50 PM
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