Asia is set to import record volumes of oil from West Africa this year as increasing supplies of high quality crude drive down its export prices and some buyers shun their traditional supplier, Iran, Reuters reported.
A Reuters survey of trade and shipping sources shows end-consumers in China, India, Indonesia and other Asian countries have bought around 1.74 million barrels per day (bpd) of West African crude for loading in the first nine months of this year, up around 8 percent from the same period in 2011.
Strong economic growth in China and other industrial economies across Asia is driving a rapid increase in demand for crude oil.
West African crude oil is typically "sweet", containing low levels of corrosive sulphur compounds, and much of it is also relatively heavy, meeting Asian demand for heavy industrial fuel oil and distillates such as kerosene.
Africa's two biggest oil producers, Nigeria and Angola, have been well placed to meet this extra consumption and exports from the West African region to Asia have risen by more than 50 percent over the last five years, Reuters data shows.
In the last year, this trend has been accelerated by a big jump in U.S. output of light, high quality crudes. This new domestic production has supplanted oil that used to be imported from Africa and also forced down global spot prices of some grades of West African crude oil.
At the same time, many oil refiners that used to take Iranian oil have been scared off by the U.S. and European Union campaign against the Islamic Republic and have instead taken attractively priced oil from Africa.
Asian buyers, who usually negotiate their spot and term import contracts at least a month before loading, have committed to take an average of around 1.64 million bpd of West African crude in the third quarter of this year, up from around 1.46 million bpd in the third quarter of 2011.
August has been a particularly strong month for imports into Asia, traders say, with 60 cargoes carrying around 1.84 million bpd heading east. China, the world's top energy consumer, has taken around 28 cargoes, while Indian refiners have bought 21 cargoes, traders say.
September looks like a slower month for imports into Asia, traders say, with price pressures taking their toll on volumes.
West African crude oil is priced against North Sea Brent crude BFO- , which has been strong relative to Dubai crude DUB-, eroding some of the price advantages enjoyed by Nigerian, Angolan and other West African grades.
Edited by: S. Isayev