How public clashes between PetroChina and Sinopec in the Middle East oil market have left traders confused
- Price of Dubai crude has fluctuated heavily in June due to aggressive bidding and offering from the trading units of PetroChina and Sinopec
- Derivatives contracts traded in June in the pricing window that sets the Dubai price were nearly triple the monthly average in 2023 and the biggest in years
Two giants in China’s oil and refining sector have taken the biggest opposing positions in Middle East crude trading in years, transforming global cargo flows and puzzling oil traders the world over.
Throughout this month, Dubai crude has fluctuated heavily, largely due to aggressive bidding and offering from the trading units of Chinese oil refiners, PetroChina and Sinopec. They are respectively the nation’s biggest oil company and its top refiner. This has only intensified with time.
Public clashes between China’s state-owned behemoths are uncommon, and in this instance the firms’ activity in the main Middle East oil price benchmark is particularly peculiar because both are big refiners who should, in theory, be eager to obtain crude as cheaply as possible. Instead, PetroChina’s Hong Kong entity has been bidding – and purchasing cargoes as a result of its bids – while Sinopec’s Unipec has been offering and selling shipments.
Nobody replied to emails sent to PetroChina and Sinopec’s media departments seeking comment.
This month, more than a thousand derivatives contracts have traded in the vital pricing window that sets the Dubai price – close to triple the monthly average in 2023 and the biggest volume for years.
