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Amid Yemen chaos, China keeps oil shipments flowing
March 30, 2015 / 10:27 AM / in 3 years

Amid Yemen chaos, China keeps oil shipments flowing

LONDON (Reuters) - China has managed to export a large shipment of crude oil from Yemen over the weekend, ship-tracking data showed on Monday, despite mounting chaos in the country after the launch of Saudi-led air strikes last week.

The 2 million barrel Very Large Crude Carrier (VLCC), Tai Hung San, left the Yemeni port of Ash Shihr on Sunday. Trading sources said the vessel was chartered by China’s state-backed oil trader Unipec. Tanker data listed it as being run by Glasford, the shipping-arm of PetroChina.

The supertanker was sailing towards the Chinese port of Qingdao on Monday after exiting the Gulf of Aden.

The shipment shows some oil is still being exported from the country, which has become a growing supplier to China despite years of falling output and political instability.

Oil markets were roiled last week after Saudi Arabia and nine other Sunni Muslim states started air strikes against the Shi‘ite Houthi militia, who control the capital and are backed by Iran, sparking fears of a wider sectarian confrontation.

Industry and local sources had said on Thursday that all major seaports were closed after the start of the strikes.

Warplanes hit the Yemeni capital of Sanaa overnight and after daybreak on Monday, residents said, marking the fifth day of the Saudi-led campaign.

Trading sources estimate Yemen’s oil exports before the start of the air strikes at around 100,000 barrels per day, with production of approximately 140,000 bpd.

China’s oil imports from Yemen in the first two months this year were 4.5 million barrels, up 315 percent from the same period a year ago, and the equivalent of three-quarters of the country’s total crude exports.

Yemen’s oil production has roughly halved since 2010, according to the U.S. Energy Information Administration.

A spokesperson for state-backed PetroChina was not immediately available to comment.

French oil major Total, which operates a liquefied natural gas (LNG) export facility in Yemen, said on Monday it had evacuated all expatriate staff.

Sources told Reuters on Sunday that LNG exports from the 6.7 million-tonnes-a-year Yemen LNG plant were running as normal.

Any disruption to Yemen’s crude exports is not expected to have a huge impact on the global oil market, with prices down almost 50 percent on this time last year due to a supply glut.

Chinese traders have said they can increase imports of West African crude if necessary.

There are some concerns about the security of oil supplies through the Bab al-Mandab shipping lane, a vital energy gateway from the Gulf to Europe and North America, though Egypt and the United States have said they will keep it open.

Additional reporting by Chen Aizhu and Adam Rose in Beijing; Editing by Crispian Balmer and David Evans

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