Omani Crude Caught in Chinese Tractor Beam

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Oman’s crude exports in November increased to just under a million barrels per day, the highest level since September 2018, with deliveries to China hitting a record high.

Omani crude typically heads to only about a dozen destinations, with China accounting for the lion’s share. Last month, however, the East Asian nation accounted for nearly all deliveries, some 96 percent, as seasonal strength drove total imports. Japan was the only other country to discharge Omani crude last month, and that was just a single cargo.

China is not only Muscat’s main oil client, but also a key investor, playing a vital role in helping Oman’s efforts to diversify its economy beyond oil and gas.

China and Oman last year announced the establishment of the China-Oman strategic partnership to boost cooperation between the two countries in different fields, according to Chinese media. Beijing is involved in massive projects in Oman, such as the China-Oman (Duqm) Industrial Park project that seeks to transform Duqm, a port town south of Muscat, into an industrial center along the Arabian Sea.

As Muscat attempts to diversify away from hydrocarbons, state-owned Oman Oil Company is also planning to list around 20 percent of its shares in an initial public offering by the end of 2020, according to Omani Oil Minister Mohammed al-Rumhi.

Aaprt from China, Oman’s top Asian oil customers are Japan, Taiwan and India. Although crude oil deliveries to Japan and Taiwan have remained at a similar level this year to previous years, India’s imports of Omani crude have halved, as New Delhi appears to be pulling in more crude from its second top supplier: Saudi Arabia. As November registered the first monthly absence of Omani crude to India in over a year, Saudi deliveries reached a record high of 1mn bpd.