American and African Crudes Soar as China's Oil Imports Rebound

In recent weeks, the prices of American and African crude oils have surged as China's oil import demand rises from a decade-low, according to traders. The Djeno crude from Congo is being sold at a $20 per barrel premium over ICE Brent, up from $15 a barrel just two weeks ago. This premium is driven by increased appetite in Asia for oil from Argentina, Canada, and Brazil as supply losses from the Middle East are offset.

Asian crude oil importers, including China, Japan, and South Korea, have turned to buying oil from far-off regions like Argentina to compensate for the Middle East's disrupted supply. China, being the world's top crude oil importer, has seen its imports rebound from a decade-low level in June. However, they are still only at about 7.3 million barrels per day, well below their pre-war levels of 11-12 million bpd.

This suggests that China remains selective in its crude purchases due to volatile and often spiking oil prices. The world's biggest losers in China's refining industry are small independent refiners who relied on cheap Iranian and Venezuelan crude. Now, with no Iranian crude flow and Venezuelan crude not as cheap, these refiners are struggling.