Haiti, the more I read, the more heartbroken I am for the people. This is totally geo-political, and there is nothing humanitarian about the US move into Haiti.
BEIJING, China (Reuters) -- PetroChina's move to take a big position in Caribbean oil storage should give the state oil company immediate muscle in the region's residual fuel trade and open up longer-term options for crude trading.
PetroChina's assumption this week of Saudi Aramco's lease on 5 million barrels of oil storage capacity at the strategically located Statia terminal in the Caribbean signaled its intent to build a global oil trading network.
The NuStar Energy LP Statia terminal on the Dutch Caribbean island of St Eustatius can handle the largest oil tankers. It is just a few days sail from major US refining and transport hubs on the Gulf Coast.
The Caribbean is growing more important as an oil trading center with the emergence of a possible new sour crude benchmark in the Argus Sour Crude Index. Still, sources say PetroChina's initial focus probably is on shorter-term marketing goals that will make it a major player in the Caribbean "bunker", or ship fuel, market.
"It will mostly be used for fuel oil or bunkers but may also be used for crude in the future," said a PetroChina trading official.
*Fuel oil is China's most widely imported oil product. It is burned in power plants, ships and processed by China's small privately owned "teapot" refineries.
Venezuela has emerged as China's biggest supplier of fuel oil as President Hugo Chavez looks to shift the country's oil marketing efforts away from the United States, even though the Caribbean nation lacks access to Pacific ports.
But the fuel oil market in Asia is becoming more competitive as demand growth eases and traders fight for market share. Analysts say economies of scale are needed to weather the downturn, driving the expansion of regional players into other markets such as the Middle East and India.
"It's in the center covering both North and South America. If you look at the bunker market alone, it's huge," said another Beijing-based PetroChina executive.
Underscoring PetroChina's eagerness to expand its reach in the Caribbean residual fuel market, the company is reportedly in talks with US refiner Valero to acquire its shuttered refinery on the island of Aruba.
The Aruba refinery mainly produces fuel oil and unfinished feedstocks, making it potentially an excellent source of fuel oil blendstocks for the Statia terminal.
But regardless of PetroChina's short-term plans for the Statia terminal, some oil traders and analysts believe it is only a matter of time until the state-backed company begins to use it as part of a crude oil trading network.
PetroChina began building a presence in the giant US physical crude markets several years ago. But with little of its own production in the region it may be some time until the PetroChina plays a bigger role in regional crude markets.
"Without equity crude it would not make business sense to use the terminal as a crude oil staging point ... the margins would be minimal," said Sarah Emerson, director of Energy Security Analysis Inc in Boston.
However, PetroChina is among the companies interested in Venezuela's Orinoco heavy oil belt, which could give it significant crude oil production in the Caribbean basin toward the end of the decade.
The widening of the Panama Canal later this decade will also alter the dynamics of the Caribbean market, making it more responsive to market forces in the Pacific.
The $5.25 billion expansion of the Panama Canal will allow the waterway to handle Suezmax ships, which can carry up to 1 million barrels of crude, when completed in 2014. It is expected to open up new trade flows for crude oil shipments from West Africa and bolster the role of Caribbean storage in the portfolio of global oil traders.
"With the canal expansion you'll have options to deliver to a lot of places. It opens up arbitrage to the (US) West Coast in a meaningful way and is going to turn the region into a key storage point for both oceans," said a US Gulf Coast crude oil trader.
This expansion of the Panama Canal, an oil chokepoint, and the proximity of Haiti and specifically the Windward Passage to that chokepoint, as the shortest trade route all mentioned here, are clear indicators of why the US is militarizing Haiti. There is no humanitarianism in this move, none what so ever!