Oman is benefitting as Asian buyers try to diversify their oil imports to reduce dependence on Iranian crude amid international sanctions, and countries like China, Japan, Taiwan and Singapore continue to increase imports from the sultanate.
Oman's total oil exports fell 2.3 per cent in the first quarter of 2012 to 65.1mn barrels year on year, but most of the traditional Asian buyers of Oman's oil increased their imports.
Oman's exports to China, which accounted for 49 per cent of the sultanate's total crude exports in the first quarter, grew 20.2 per cent to 31.9mn barrels against 26.5mn barrels in the corresponding period of last year.
Exports to Japan, the second largest buyer of Oman's crude, increased 11.2 per cent to 11.1mn barrels. Exports to Taiwan surged 230 per cent to 6.6mn barrels, while exports to Singapore jumped 229 per cent to 4.8mn barrels in the first quarter.
However, South Korea cut imports from Oman by 59 per cent to 1.6mn barrels from 3.8mn barrels, while India cut its intake by 88 per cent.
Robin Mills, a Dubai-based oil economist and head of consulting at Manaar Energy Consulting, said that sanctions on Iran have been having a significant effect on the crude oil market.
He said, "The higher imports from Oman by China in January and February may have been related to its payment dispute with Iran when volumes were cut. Asian buyers, particularly Japan and South Korea, are trying to diversify their purchases to reduce use of Iranian crude."
Jarmo Kotilaine, chief economist at Riyadh-based NCB Capital, said that Asian buyers have had to redraw their supply plans due to international pressure to reduce dependency on Iranian oil.
He said, "Oman clearly is an obvious alternative, albeit only a very partial solution. In Japan, there is a significant structural-demand increase as the country reduces its reliance on nuclear energy. This fluid environment naturally supplies opportunities to seek better terms as contracts are renewed."
© Muscat Daily 2012
