Sydney — Australia's import of crude oil and other refinery feedstocks fell in September and the shipments are expected to continue falling in the fourth quarter as local refiners slash run rates and mull plant closures, industry and trading sources said Nov. 18.
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The country imported 6.08 million barrels in September, down 21.4% year on year and 11.8% lower than in August, preliminary data from Australia's Department of Industry, Science, Energy and Resources released Nov. 17 showed.
Australia's crude imports could fall to around 12.7 million barrels in Q4, down 29.4% from 18 million barrels received in Q3, according to refinery operation managers and commodity market analysts based in Sydney, Canberra and Melbourne surveyed by S&P Global Platts. The survey participants include refining operation sources at Viva Energy and analysts at Westpac.
Most of the domestic refineries have either slashed run rates recently or are considering shutting down their operations due to tepid oil product margins and weak fuel demand caused by the prolonged coronavirus pandemic.
BP Australia said on Oct. 30 that it plans to shut its 146,000 b/d Kwinana refinery in Western Australia and convert it to a fuel import terminal. Australia's 120,000 b/d Geelong refinery is also mulling closure, following a $49.4 million loss in H1 2020, Platts reported previously.
Ampol, formerly Caltex Australia, had also announced in October the start of a "comprehensive review" of its Lytton refinery as a prolonged period of poor refining margins and an uncertain outlook threaten the closure of the 109,000 b/d facility.
As a result, Australia's major low sulfur crude suppliers in Southeast Asia and the US may struggle to push their barrels to the Oceania outlet, sweet crude and condensate spot cargo traders in Singapore and Melbourne said.
Malaysia was Australia's largest supplier of crude for the second month running with 1.6 million barrels in September. Nevertheless, that volume was down 37.5% year on year and 16.7% weaker than August.
Australia's crude imports from the US in September stood at 612,278 barrels, down 63.1% year on year and 41.4% lower from August, the data showed.
AUSTRALIA CRUDE AND OTHER REFINERY FEEDSTOCK IMPORTS (Unit: barrels)
CRUDE IMPORTS BY SUPPLIERS (Unit: barrels)
Source: Australian government, Department of Industry, Science, Energy and Resources
Original data in megaliters, converted to barrels using a conversion factor of 6289.81