Crude oil imports for China's independent refineries are driving demand
In 2015, China imported 330 million tons of crude oil. Crude oil imports totaled 186.5 million tons in the first half of 2016, an increase of 14.18 percent year on year. The strong rise in crude oil imports in the first half was largely driven by the voracious appetite of local independent refiners. Since 2016, more independent refiners have gained access to crude oil, and independent refiners have bought into crude oil in low oil prices.

Independent refinery crude oil imports of Shandong
Qingdao customs, Ningbo customs and Dalian customs are the top three Chinese crude oil imports in the first half of 2016. Among them, the import of crude oil from Qingdao customs from January to June reached 522.71 million tons, rose by 60.7% year on year. The vast majority of China's independent refineries are in Shandong, and the surge in the import of crude oil from Qingdao customs has reflected that the import enthusiasm of local independent refineries is the main reason for the continuous increase in crude oil imports.

Raw material purchasing for independent refinery in different countries
From the structure of the first half of China's crude oil import in 2016, it could be seen that Sinopec crude oil import channel is mainly from Middle East and west of Africa, while petro china is dominated by Russia and South America. National oil companies are relative to the stability of the channels, but local independent refiners mainly consider to crude oil price. The import channel is relatively complexed, mainly in the south of the beautiful Venezuela, Brazil and Russia and Angola, Oman.

Country features of independent refinery crude oil procurement
From perspective of the source, Venezuela, Russia, Angola and Oman are the main sources of crude oil for the independent refiners. However, comparing with petro china, Sinopec and other state-owned oil companies, the procurement channels and modes of the independent refinery are more dispersed, and the majority of them are in short supply.

The rules and characteristics of crude oil procurement for independent refinery
1. The purchase of crude oil from international markets is mainly in stock;

2. Mainly in small batches of tens of thousands of tons to more than ten thousand tons.

3. The payment method is mainly cash, and the domestic and international letters of credit are less expensive.

4. Low trust with international market customers;

5. Focusing on the purchase of individual soldiers. When in the negotiation, it is at a disadvantage;

6. Business experience is based on domestic trade and is less familiar with international trade;

7. Lack of spirit of contract，so that the occurrence of default are often in the international crude oil market.

1. China's current procurement international mainstream sources of supply of crude oil are in the Middle East, west of Africa, South America, Russian federation and so on. Conforming to the principle of economy and benefit from the sources and it will gradually become a mainstream independent refinery raw material source. The resources from far East, southeast Asia, Australia were main but now is auxiliary.

2. In the Middle East, west of Africa and South America, the raw materials are more suitable for the domestic plant characteristics of the independent refinery, and the procurement will gradually increase.

3. Analysis of logistics conditions such as international, domestic shipping and wharf, the current cost of the vessel is relatively high, and the VLCC level procurement has a cost advantage. Logistics gradually optimizes, and VLCC level procurement increases.

4. The international trade experience of the independent refinery and the bank credit are insufficient, and the negotiation ability is low, the purchase quantity is small but the overall cost is high. Joint procurement will gradually increase.