China’s ZPC resells some Abu Dhabi term crude in Q1 2024

China’s Zhejiang Petroleum and Chemical Corp (ZPC) has sold some of its term crude supplies from Abu Dhabi National Oil Company (ADNOC) in the first quarter next year in a rare move by a refiner, four market sources said on Thursday.

The sales come after ZPC increased term purchases from its new shareholder Saudi Aramco while domestic margins have weakened recently prompting Chinese refiners to reduce operating rates.

ZPC, which operates an 800,000 barrels-per-day refining complex, sold medium-sour Upper Zakum crude and light-sour Murban crude to trading companies via tenders, the sources said.

Glencore GLEN.L bought the Upper Zakum cargoes at around 5 cents a barrel above the grade’s official selling price (OSP) while the Murban cargoes were sold to Trafigura at about 25 cents a barrel above the OSP, they said.

The buyers will lift one cargo each per month.

ZPC could not immediately be reached for comment. ADNOC declined to comment on the matter.

ZPC has increased its Saudi crude purchases to about half of its demand since September, after Saudi Aramco 2222.SE acquired a 10% stake in Rongsheng Petrochemical Co Ltd 002493.SZ. The acquisition included a 20-year Saudi crude supply deal to Rongsheng-controlled ZPC.

“Maybe ZPC do not need that much crude from other suppliers as they are taking more Saudi oil, or they could be planning run cuts in the first quarter,” said one of the sources.
Source: Reuters (Reporting by Muyu Xu; editing by Miral Fahmy)