Aramco is cleanest supplier of oil to China, US research finds

1 / 2
Saudi Aramco’s Manifa oilfield. The national oil company is China’s cleanest supplier of crude, the annual CERAWeek energy conference in Houston heard. (Reuters)
2 / 2
Saudi Aramco CEO Amin Nasser speaks at the annual CERAWeek energy conference in Houston where it was revealed that the national oil company was China’s cleanest crude supplier. (Reuters)
Updated 08 March 2018

Aramco is cleanest supplier of oil to China, US research finds

HOUSTON: Saudi Aramco supplies the environmentally cleanest oil to China, the biggest energy consumer in the world, according to a recent scientific study.
A research paper by Nature Energy, a publication of Stanford University in the US, compared the greenhouse gas (GHG) emissions from 13 big oil producers that shipped crude oil to China.
The results showed that Saudi crude had the lowest average carbon intensity when processed and used by Chinese industry, meaning that it produced fewer environmentally harmful emissions than other suppliers.
Venezuela sold China the “dirtiest” oil, according to the study, followed by Iran and Iraq, the researchers found.
Oil industry experts said that the findings reflect not only the higher quality of Saudi crude, but also the efficiency of the technology used to get the crude from reservoirs to shipment.
The study was highlighted at the CERAWeek by IHS Markit event in Houston, Texas. Amin Nasser, chief executive of Saudi Aramco, said: “Not all crudes are equal, and (the research shows that) Saudi Arabia has among the lowest carbon intensities of crude production in the world.”
The researchers said: “Oilfields in Saudi Arabia showed the lowest average GHG intensities due to highly productive reservoirs (high productivity index), low water production (leads to lower mass lifted and less energy expenditure in separation per unit of oil extracted) and low flaring rates.”
Ahmad Al-Khowaiter, Aramco’s chief technology officer, said that the findings showed the value of the big research and development program that the Saudi national oil company has made one of its main business priorities.
“It is good business, not just good environmental practice. We are the lowest cost producer, and the lowest emissions producer. It will help achieve sustainability through greater energy efficiency,” he said.
China is the biggest oil consumer in the world, but is also a major environmental polluter, mainly because it continues to use local coal as its main energy source.
The CERAWeek event has sought to understand the country’s new attitude toward the environment, dubbed “making China skies blue again” by the government.
Mikael Höök, an energy scientist at Sweden’s Uppsala University, said: “Documenting the emissions and net energy of a crude supply could be essential to meeting national emission and energy security targets.
“The data presented by Nature Energy indicates that the impact of replacing or phasing out just the most carbon-intensive 10 percent of Chinese oil imports could be significant — not just for continuing climate-informed energy strategies but also for geopolitical and energy security reasons, such as avoiding potentially risky suppliers in regions with security concerns.
“Improved understanding of Chinese oil policies and import preferences are, therefore, vital for modeling emission trends on local and global scales with a nuance that can inform policy realistically,” he said.


Middle East share of India’s oil imports falls to 4-year-low

Updated 32 min 56 sec ago

Middle East share of India’s oil imports falls to 4-year-low

  • Oil minister says India is working to diversify its oil supply sources

NEW DELHI: Indian imports of Middle Eastern oil plunged to a four-year low in 2019, tanker data shows, as the energy-hungry nation diversifies its supplies to cut costs and shield itself from geopolitical tensions.

India, the world’s third-biggest oil consumer, imports about 84 percent of its oil needs and traditionally relies on the Middle East for the majority of its supplies. However, the region’s share of India’s crude shrank to 60 percent last year — down from 65 percent a year ago and the lowest since 2015 — as record output from the US and elsewhere offered opportunities for importers to tap other sources.

India shipped in 2.68 million barrels per day (bpd) oil from the Middle East in 2019, down about 10 percent from 2018, and around 1.8 million bpd from elsewhere, the data reviewed by Reuters showed.

Deeper than expected oil output cuts by OPEC and allies, shouldered by Saudi Arabia, and less supply from Iran due to US sanctions also dented India’s intake of Middle Eastern oil, said Ehsan Ul Haq, analyst with Refinitiv.

Last year, sanctions and output cuts by OPEC and its allies, known as OPEC+, reduced the group’s supplies by 1.9 million bpd from 2018, while non-OPEC supply rose by 2 million bpd, the International Energy Agency said in its latest report. The IEA forecast that producers outside the OPEC+ pact would increase supplies by 2.1 million bpd in 2020.

India is working to diversify its oil supply sources to cut dependence on the Middle East, Oil Minister Dharmendra Pradhan said last week.

The drive to expand crude sources also reflects a push by Prime Minister Narendra Modi to bolster ties with countries such as Russia and the US.

India’s overall oil imports in 2019 fell by about 2.1 percent to 4.48 million bpd, the data showed, because most refiners temporarily shut processing units for upgrades ahead of new fuel standards in 2020. India is migrating to Euro VI compliant fuel from April 1.

Imports from CIS (former Soviet Union) nations rose in 2019 by about 65 percent to 171,000 bpd, the data showed. Intake of African grades rose by 7.3 percent to about 713,000 bpd, while US supplies was up by about 63 percent to 181,000 bpd. US oil accounted for about 4 percent of India’s overall imports in 2019, up from just 2.5 percent a year earlier.

Demand for heavy Middle Eastern grades was also affected by a shift in bunker fuel specifications from January, following new rules promoting lower sulfur fuels.

“Most Middle Eastern grades yield high sulfur fuel oil (HSFO) and because of new marine fuel norms, refiners are buying more from other producers to cut production of HSFO and increase output of very low sulfur fuel oil,” Haq said.