Page 14 - DMEA Week 03 2022

DMEA NEWS IN BRIEF DMEA

SUPPLY countries as China blasted Washington’s exchange, a look at some statistics on the
unilateral sanctions on Iran. continent’s petroleum products demand and
China discloses Iranian oil damaged Iran’s economy after withdrawing supply is in order.
The U.S. reimposed sanctions that badly
“Currently, Africa’s daily petroleum
imports amid US sanctions from the nuclear pact in 2018, saying the demand is 4.3 million barrels per day (mbd).
terms did not do enough to curb Iran’s nuclear
Of this volume, 57 per cent is produced
China officially imported Iranian crude oil activities, ballistic missile program and locally (on the continent) while 43 per cent is
for the first time in a year despite ongoing regional influence. imported. When Dangote is fully operational,
sanctions by the United States government, A year later, Iran began to gradually breach the percentage of Africa’s products imported
according to the data released by the General the accord, rebuilding stockpiles of enriched shall drop to 36 per cent. This is even as the
Administration of Chinese Customs on uranium, refining it to higher fissile purity total volume of products demand rises to 5.4
Thursday. and installing advanced centrifuges to speed mbd.
China brought in 260,312 tonnes of Iranian up output. “You can therefore see the huge impact
crude oil in December, according to data from The project aims to significantly expand that Dangote refinery shall be made to overall
the customs, which last recorded Iranian oil China’s economic and political influence and products supply in Africa. Dangote shall be
inflows in December 2020 at 520,000 tonnes. has raised concerns in the U.S. and elsewhere. supplying over 12 per cent of Africa’s products
It was not immediately clear which DAILY SABAH demand.
company brought in the latest cargo, which is “That is huge savings for a continent
equal to the amount of oil that would fit onto that has scarce foreign exchange and little
one very large crude carrier (VLCC) tanker REFINING to export. We shall save from buying
and which terminal it was discharged into. abroad and from shipping and insurance
Unofficially, China’s imports of Iranian Dangote to reduce Africa’s costs. Furthermore, the success of Dangote
oil had held above 500,000 barrels per day could incentivise the rise of similar
on average between August and October, as product imports by 36% projects, the noise about energy transition
buyers judged that getting crude at cheap notwithstanding,” the oil analyst noted.
prices outweighed the risks of busting U.S. The African Petroleum Producers Ibrahim also hailed Dangote’s decision to
sanctions, Reuters reported in November. Organisation (APPO) has said that Dangote go ahead with the construction of a crude
To evade the sanctions, traders said that Oil Refinery would reduce importation of oil refinery despite a campaign against fossil
Iranian crude has been exported to China petroleum products production into the fuels, adding that the demand for fossil fuel is
marked as oil from Oman, the United Arab continent by as much as 36 per cent. going to continue for several decades to come.
Emirates (UAE) and Malaysia, squeezing out Besides, the organisation expressed “We believe that Dangote made a very wise
supplies from Brazil and West Africa, traders confidence that the success of the project decision to proceed with the project, despite
have said. could incentivise the rise of similar projects the campaign against fossil fuels. There will
Imports from Iran have accounted for across Africa despite the current focus on be demand for petroleum products for many
about 6% of China’s crude oil imports, energy transition. decades to come. Indeed, we see petroleum
according to shipping data and trader The Secretary-General, African Petroleum products prices rising steadily in the next few
estimates. Producers Organisation, Dr. Omar Farouk years for at least two decades.
China had announced on Jan. 15 that Ibrahim, said in an interview that the refinery “This is because new refineries are not
Beijing and Tehran would begin a 25-year would be supplying over 12 per cent of Africa’s coming up in Europe and North America,
strategic cooperation agreement that would demand when it becomes operational. where Africa imports 34% of its supplies
bring Iran into China’s Belt and Road Ibrahim stated, “To appreciate the impact because their governments have embraced
Initiative, a multi-trillion-dollar infrastructure that the Dangote refinery is going to have energy transition, some willingly, others due
scheme intended to stretch from East Asia to on African economies and especially on the to pressure. So, some of the sources of Africa’s
Europe. The move was aimed at strengthening supply of petroleum products, and to some imports are going to dry up. At the same time,
economic and political ties between the two extent the conservation of scarce foreign Africa will not be in a position to fast-track

P14 www. NEWSBASE .com Week 03 20•January•2022