West African crude imports into Asia have been running at record levels through much of 1999 and on some months have surpassed one million barrels per day (bpd), largely supported by a narrow Brent/Dubai differential.

However for August, imports into Asia were estimated around 500,000 bpd. Oman crude has become more attractive to Asian refineries because it is priced against Dubai.

Traders estimated China has bought one Brent cargo for August loading, lower than in past months when it had bought a few cargoes each month in addition to its purchase of West African cargoes. A source with one Chinese state oiltrader said August West African purchases fell sharply.

"We bought more Oman in August, at five to six cargoes," said the source. In July the company did not lift a single Oman cargo, the source said. Adding to one August Oman cargo bought by another state oil trader, China has imported six to seven Oman cargoes for August. Chinese traders said Oman was preferred over other Middle East grades because it was a good replacement for West African crude. Asian crudes are also a good replacement for West African grades, but Oman is preferred for August because it is relatively cheaper. "Our refiners are balking at the numbers," said a trader, referring to other Asian grades that could replace West African crude.

Oman is one of China's popular imports. Between January and June, China imported 1.8 million tonnes, or 13.5 million barrels, of Oman crude, up 11 percent year on year and making it the second largest import after Indonesian crudes. The imports represented 11 percent of total crude imports for thefirst half of the year.

In 1998, China imported 5.79 million tonnes of Omani crude, representing 21 percent of total imports. Traders said the decline in the proportion of Omani crude imports this year illustrated the increasing popularity of West African crudes to Asia. "And on the domestic front, supply is not bad," the trader said. Traders said there was more domestic crude supply both from onshore and offshore oilfields. Increased domestic supply was largely attributed to a sharp fall in crude export, they said. China's crude exports were also halved to 3.78 million tonnes in the first half of 1999 as compared to the same period last year, Chinese customs figure show.