Russia seals position as top crude oil supplier to China

Geopolitical doubts forced China to cut imports from Iran and Venezuela with Iranian shipments falling by 20 percent. (Getty Images)
Updated 25 January 2019
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Russia seals position as top crude oil supplier to China

  • Saudi Arabia is second-biggest source with 8.7% rise in exports after trade war hits US shipments
  • December crude imports from Russia up 40%, Saudi volumes up 48%, Venezuela, Iran imports tumbled in 2018

BEIJING/SINGAPORE: Russia came in as China’s largest crude oil supplier in December, cementing the top spot for all of 2018 for a third year in a row ahead of rival Saudi Arabia, customs data showed on Friday.
Imports from Russia reached 7.04 million tons, or 1.658 million barrels per day, in December, up 40 percent from 5.03 million tons a year earlier, according to the data from the General Administration of Customs.
For the full year, Russian imports rose to 71.49 million tons, or 1.43 million bpd, up 19.7 percent from 59.7 million tons in 2017.
Demand for Russian crude was supported by a rise in throughput by China’s private refiners, who favor Russian grades such as ESPO, while geopolitical uncertainties also forced China to import less from countries such as Iran and Venezuela.
Russian oil giant Rosneft has also marketed its ESPO grade more aggressively, signing new long term supply deals with state oil companies such as ChemChina and PetroChina.
Saudi Arabia supplied China with 6.97 million tons in December, or 1.64 million bpd, up 48 percent from 4.71 million tons a year earlier.
For 2018, OPEC’s top supplier boosted shipments to China by 8.7 percent to 56.73 million tons, or 1.135 million bpd.
That means Russia’s lead over Saudi Arabia in supplying China almost doubled to 295,000 bpd in 2018 from 150,000 bpd a year earlier.
US shipments to China — which have been hit by a trade war between the two nations — came in at zero in December. Imports for 2018 were up 24.8 percent from 2017 at 245,616 bpd.
Chinese oil trader Unipec plans to resume US crude shipments to China by March, Reuters reported in December. Venezuelan supplies to China tumbled 24 percent in 2018 to 16.63 million tons, or 332,600 bpd, after the OPEC member’s production fell to a seven-decade low amid a lack of investment, mismanagement and fleeing workers. Iranian imports were at 2.14 million tons in December, or 503,896 bpd, down 12 percent from a year earlier. Full year Iranian imports dropped to 29.274 million tons, or 585,475 bpd, down 20 percent from 2017 after the United States imposed sanction on Tehran over its disputed nuclear program.
China is among the countries that were granted a waiver from sanctions on Iranian oil imports, allowed to buy 360,000 bpd of oil for 180 days until May.


BMW picks insider Zipse as CEO to catch up with rivals

Oliver Zipse
Updated 20 July 2019
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BMW picks insider Zipse as CEO to catch up with rivals

  • German giant has lost ground to Mercedes-Benz and Tesla as tech steps up

FRANKFURT: BMW has named Oliver Zipse as its new CEO, continuing the German carmaker’s tradition of promoting production chiefs to the top job even as the auto industry expands into new areas such as technology and services.
Hailing Zipse’s “decisive” leadership style, BMW hopes the 55-year-old can help it win back its edge in electric cars and the premium market  from rival Mercedes-Benz.
But some analysts questioned whether Zipse was the right choice with new fields such as software and services like car-sharing becoming increasingly important.
“What is intriguing is the cultural bias to appoint the head of production. It works sometimes but ... being good at building cars is not a defining edge the way it was 20 years ago,” said Jefferies analyst Philippe Houchois.
Current CEO Harald Krueger, and former chiefs Norbert Reithofer, Bernd Pischetsrieder and Joachim Milberg were all former production heads.
Zipse joined BMW as a trainee in 1991 and served as head of brand and product strategies and boss of BMW’s Oxford plant in England before joining the board.
He will become chief executive on Aug. 16, taking over from Krueger who said he would not be available for a second term.
“With Oliver Zipse, a decisive strategic and analytical leader will assume the Chair of the Board of Management of BMW. He will provide fresh momentum in shaping  the future,” said Reithofer.
Zipse helped expand BMW’s efficient production network in Hungary, China and the US, in a move that delivered industry-leading profit margins.
Under Krueger, BMW was overtaken in 2016 by Mercedes-Benz as the best-selling luxury car brand.
It also had an early lead over US  rival Tesla in electric cars, but scaled back ambitions after its i3 model failed to sell large numbers.
Reithofer initially championed Krueger’s low-key consensus-seeking leadership, but pressured him to roll out electric vehicles more aggressively, forcing Krueger to skip the Paris Motor Show in 2016 to reevaluate BMW’s electric strategy.
Krueger’s reluctance to push low-margin electric vehicles led to an exodus of talented electric vehicle experts, including Christian Senger, now Volkswagen’s (VW) board member responsible for software, and Audi’s Markus Duesmann, who is seen as a future CEO of the company.
Both were poached by VW CEO Herbert Diess, a former BMW board member responsible for research who was himself passed over for BMW’s top job in 2015.
VW has since pushed a radical 80 billion euro ($90 billion) electric car mass production strategy, and a sweeping alliance with Ford.

Other skills
“A CEO needs to have an idea for how mobility will evolve in the future. This goes far beyond optimising an existing business,” said Carsten Breitfeld, chief executive of China-based ICONIQ motors, and former BMW engineer. “He needs to build teams, attract talent, and promote a culture oriented along consumer electronics and internet dynamics.”
German manufacturers have dominated the high-performance market for decades, but analysts warn shifts towards sophisticated technology and software is opening the door to new challengers.
“Tesla has a lead of three to four years in areas like software and electronics. There is a risk that the Germans can’t catch up,” UBS analyst Patrick Hummel said.
Germany’s Auto Motor und Sport car magazine, normally quick to champion German manufacturers, this week ran a cover questioning BMW’s future.
“Production expertise is important, but if you want to avoid ending up being a hardware provider for Google or Apple, you need to have the ability to move up the food chain into data and software,” a former BMW board member said.