Crude oil exports from Iran to Asian countries—its biggest clients—sank to an average daily of 762,000 bpd, official customs data and shipping data reported by Reuters revealed. This is the lowest monthly average for Iranian crude oil exports to Asia in five years and a 56.4-percent decline on an annual basis.

South Korea imported no Iranian crude last month, the second month of no imports in a row as one of the world’s top crude oil importers sought to secure a waiver from U.S. sanctions, which it successfully did.

Japan continued buying some Iranian crude but at a much lower rate than usual. The average daily shipments to Japan stood at 48,033 bpd, the lowest in six months, according to Japanese trade ministry data. The country also stopped importing Iranian crude last month and has yet to resume orders after it, too, was granted a waiver from the U.S. sanctions.

China imported an average of 247,160 bpd of Iranian crude last month, down 64 percent on the year, but will now most likely ramp up shipments after it scored a sanction waiver and found a way, together with Tehran, to process payments for oil even after the waivers expire next year.

India, interestingly, continued importing Iranian crude at a rate almost unchanged from September, Reuters notes. Shipments of the commodity to this destination averaged 466,400 bpd, down by just 0.2 percent from September. Yet this was lower than the average India imported from Iran over the first ten months of the year, which came in at 579,600 bpd.

China has been the biggest buyer of Iranian crude so far this year, importing it at a rate of 613,200 barrels daily over January to October. This, however, is lower than the rate of imports a year earlier, which stood at 634,749 bpd.

By Irina Slav for Oilprice.com

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(Bloomberg) — There’s a rising star in the oil world, and it’s heavy and sweet.

Dense, low-sulfur oil, known in industry parlance as heavy sweet crude, is fetching increasingly stronger prices relative to benchmark lighter grades. For example, Angola’s Dalia traded at just 10 cents below Brent oil last month, up from a discount of $4.50 in January 2016, according to S&P Global Platts. Australian Pyrenees traded at $4 more than Brent, its widest premium in more than three years, according to trading sources.

The shifting values are indicative of the powerful forces that are pulling apart long-held relationships between oil prices around the world, in particular the U.S. shale boom and an overhaul of marine fuel regulations.

Heavy sweet crude has come into favor because it yields a lot of diesel and low-sulfur fuel oil when it’s refined. Those fuels are seen coming into heavy demand as new rules due to take effect in 2020 mean ships will use them more as an alternative to high-sulfur fuel oil, which is produced readily from sour crude. What’s more, lighter prices are under pressure because of a glut of U.S. shale oil and the gasoline it yields in abundance.

“What’s really in the sweet spot are heavy sweet crudes, which is offshore Angola and Brazil,” Martijn Rats, an analyst with Morgan Stanley, said in an interview. “Those should trade very strongly, but it’s a relatively small part of the oil market.”

Only about 500,000 barrels a day of heavy sweet oil are exported globally, accounting for just 1 percent of total seaborne trade, according to Matt Smith, director of commodity research at ClipperData LLC. Angola, Brazil and Chad are among the biggest sources.

Profits Diverge

Driving the focus on crude quality is the spread between the two most prevalent oil products, gasoline and diesel, which historically have had similar values. Gasoline futures in New York tumbled in November to nearly $25 a barrel less than diesel, the largest discount since 2014.

Most of the growth in crude production in recent years has come in the form of light shale oil in the U.S., while heavier exports from Iran and Venezuela are in decline because of sanctions and political disarray. That’s helped boost gasoline production and sent stockpiles of the fuel in the U.S. to a record seasonal high.

“This mismatch between the crude we make and products that we need is going to be a feature going forward,” Rats said on the sidelines of Morgan Stanley Asia Pacific Summit in Singapore. “My sense is that the excess in the gasoline market is here to stay for at least a while to come.”

Price Adjustments

The International Maritime Organization regulations set to go into effect at the start of 2020 will limit the amount of sulfur in marine residual fuel. That means that many of the world’s more basic refineries will choose to run low-sulfur oil, including Dalia and Pyrenees.

“Those low sulfur, heavy sweet crude oils will now have a greater value to the refining market as the residual portion of the crude oil will see new demand,” said Andy Lipow, president of Lipow Oil Associates in Houston.

The heavy, sweet oils that should benefit from this make up a small fraction of overall crude production, but the trend will also impact larger swaths of the market. Europe’s Brent crude tends to produce more diesel than West Texas Intermediate, so its premium to the U.S. benchmark should grow, Rats said. Middle Eastern benchmark Dubai, which is high in sulfur, should weaken relative to Brent in the second half of 2019, he said.

With assistance from Alaric Nightingale, Jack Wittels and Sherry Su. To contact the reporters on this story: Serene Cheong in Singapore at scheong20@bloomberg.net; Dan Murtaugh in Singapore at dmurtaugh@bloomberg.net. To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net Alexander Kwiatkowski, Ovais Subhani.

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Crude oil traders are now able to use a blockchain-based platform to finalize their deals.

VAKT, a London-based independent company backed by energy majors, commodity traders and banks, announced its launch Nov. 29. It’s the first of its kind in the energy market.

The Blockchain platform, a digital ledger used to record transactions and also behind Bitcoin cryptocurrency, has been hailed by many as a way to alleviate challenges in the oil and gas industry.

Oil majors BP plc, Equinor ASA and Royal Dutch Shell plc are among first users of the live platform, as it currently is available to trade specifically in North Sea crude oil contracts.

VAKT has future plans to extend its platform to all physically traded energy commodities. In fact, it will open to U.S. crude oil pipelines and Northern Europe refined product barges in early 2019.

“We’ve been overwhelmed by the strength of response to the VAKT concept. Launching into our first market with such high-calibre first users is a transformational moment for us and the industry,” John Jimenez, interim CEO, said in a company statement. “But it’s just the start: success for a blockchain solution depends on widespread adoption and we’re looking forward to seeing the ecosystem grow.”

VAKT worked with software consultancy ThoughtWorks to create its platform. It’s also underpinned by JPMorgan’s Quorum private distributed ledger.

“Digitalization is changing how the energy value chain works,” said Andrew Smith, EVP Trading & Supply, Shell International Trading and Shipping Company Limited. “Collaboration with our peers and some of the industry’s key players is the best way to combine market expertise and achieve the scale necessary to launch a digital transaction platform that could transform the way we all do business. Ultimately the aim is improved speed and security, which benefits everyone along the supply chain from market participants to customers.”

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Higher prices and continued shale resource development helped push U.S. crude oil and natural gas proved reserves to new record highs in 2017, the Energy Information Administration (EIA) said in a report on Thursday.

Proved reserves of U.S. crude oil jumped by 19.5 percent in 2017 from the end of 2016, reaching 39.2 billion barrels and beating the previous record of 39.0 billion barrels set in 1970.

Crude oil reserves reached an all-time in 2017, as higher prices typically raise reserve estimates because exploration and production companies believe that more of their resource bases can be produced. Last year, the average WTI Crude spot price rose by 20 percent compared to 2016, exceeding $60 a barrel for the first time since June 2015 and helping to drive increases in reserves, the EIA noted.

In its report for 2016, EIA said that the development in the Permian led to Texas showing the largest net increase in proved reserves of crude oil and lease condensate of all U.S. states, although the total U.S. crude oil reserves at end-2016 were virtually the same as at end-2015.

Related: The Biggest Winners Of The Oil Price Slump

In 2017, higher prices drove proved crude oil reserves to records, and Texas again had the biggest net increase in reserves. Texas added 3.1 billion barrels of proved reserves, followed by New Mexico which added 1.0 billion barrels of reserves. Thanks to the development in the Permian and higher oil prices, Texas and New Mexico led the reserves additions, especially in the stacked oil-bearing formations of the Spraberry Trend and the Wolfcamp/Bone Spring shale play.

Proved natural gas reserves across the U.S. jumped by 36.1 percent to 464.3 trillion cubic feet (Tcf) in 2017, beating the previous record of 388.8 Tcf from 2014, also thanks to Henry Hub natural gas prices rising by 21 percent last year.

Pennsylvania and Texas were the number-one and number-two states in terms of largest net increases in reserves, respectively, due to higher prices and development in the Appalachian and Permian basins and the Haynesville/Bossier shale play in eastern Texas and northern Louisiana, the EIA said.

The share of shale gas reserves of all U.S. natural gas reserves rose to 66 percent in 2017 from 62 percent in 2016.

By Tsvetana Paraskova for Oilprice.com

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LONDON (Bloomberg) — For the oil market, it looks like the real OPEC meeting will come a week ahead of schedule.

The cartel is set to meet on Dec. 6 in Vienna, but days earlier the key decision makers are set to gather on the sidelines of the G20 summit in Buenos Aires in a meeting that may well decide the direction of oil prices in 2019.

Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin, who lead the world’s two largest oil exporters and have been working together to manage the oil market for the past two years, both plan to be in the Argentinian capital at the end of next week. Just as important will be U.S. President Donald Trump, who’s made his opposition to OPEC a regular theme in his Twitter diplomacy.

“I expect President Trump will be discussing the optimal price range with Crown Prince Mohamed bin Salman and President Putin at the G20,” said Bob McNally, president of Washington consultant Rapidan Energy Advisors LLC and a former White House energy official.

The oil market is abuzz with talk that MBS, as Prince Mohammed is known, may not be able to defy Trump’s desire for lower oil prices after the White House supported him following the killing of Washington Post columnist Jamal Khashoggi.

“The market is assuming the Saudis won’t be able to cut,” said Amrita Sen, chief oil analyst at Energy Aspects Ltd. in London.

Khalid Al-Falih and Alexander Novak, the Saudi and Russian energy ministers, are also scheduled to travel to Buenos Aires together with their principals, according to people familiar with their plans, asking not to be named because their agendas haven’t been disclosed yet. Their presence reinforces the impression that Saudi Arabia and Russia will try to reach a deal ahead of the OPEC meeting a few days later.

It wouldn’t the first time the two energy superpowers used a G20 to decide on oil policy.

At a summit in Hangzhou, China, in early Sept. 2016 Putin sat down with MBS to discuss how to revive oil prices. Hours after their private meeting, the Saudi and Russian oil ministers appeared in a joint press conference. The message was clear: Riyadh and Moscow were working together and a few days later,they announced that OPEC and a number of non-OPEC nations would cut production.

The gathering in Buenos Aires comes after a week of near-panic in the oil market. Brent crude, the global benchmark, plunged 6.1% to a one-year low of $58.80/bbl on Friday, down 22% this month on growing concerns the world is oversupplied. West Texas Intermediate, the U.S. benchmark, fell close to $50/bbl.

Trump had already celebrated the plunge on Wednesday, tweeting: “Oil prices getting lower. Great!” Yet, he wants more: “Thank you to Saudi Arabia, but let’s go lower!”

But the petro-diplomacy is complicated by the fallout from Khashoggi’s murder. Trump on Thursday confirmed that the Central Intelligence Agency told him that MBS ” might have done it,” in reference to who was responsible for the assassination. But he insisted that the CIA “didn’t conclude” that the prince gave the order.

“You can conclude maybe he did or maybe he didn’t,” Trump said about the CIA report. “Whether he did or whether he didn’t, he denies it vehemently.”

Trump has vowed that the Khashoggi killing won’t upend the White House’s relations with the prince.

“We want low oil prices and Saudi Arabia’s really done a good job,” he said. For the U.S. president, cheap energy equates to a tax cut for the middle class — key to maintaining a tired-looking economic expansion.

For MBS, Trump’s support is key to avoiding more aggressive American action. Congressional leaders have been more skeptical about his denials. Senator Lindsey Graham, a senior Republican who was a long-time supporter of Saudi Arabia, is pushing for “serious sanctions, including appropriate members of the royal family.”

So far, the 33-year old prince appears to be doing his best to keep oil prices low. Saudi crude production has reached an all-time high in November, surging to 10.8 MMbbl to 10.9 MMbpd, up from 10.65 million in October, according to industry executives who track Saudi output.

Yet, not everyone in the oil market is convinced that MBS will keep the taps open to please Trump. As much as the U.S. president wants low oil prices, the Saudi prince needs higher oil prices to to finance social and military spending, as well as the lavish lifestyles of hundreds of princes.

“It remains our view that the Kingdom will adopt a ‘Saudi First’ policy and prioritize its own economic and social welfare above pleasing the American president,” said Helima Croft, chief commodities strategist at RBC Capital Markets LLC and a former CIA analyst.

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CARACAS (Bloomberg) — Venezuela’s fuel shortages are worsening as mass resignations at the state oil company’s tanker fleet have delayed gasoline shipments.

Petroleos de Venezuela SA’s refineries are running at less than a quarter of their capacity, forcing the country to rely on imported gasoline. Once the cargoes are unloaded at import docks, smaller ships distribute fuel to terminals along the coast, where its loaded on trucks to refuel inland stations. But as Venezuelan tankers lose engineers and helmsmen, delivery delays are becoming increasingly frequent, according to people with knowledge of the situation.

Gasoline lines are one of the challenges of daily life in Venezuela, along with the scarcity of basic goods, regular power outages and a lack of public transport. Gas prices are still the among the cheapest in the world, with the black market rate earlier this month less than one cent per gallon. Maduro has yet to increase prices after vowing to do so at the end of September.

Resignations and requests for leave by personnel at PDV Marina, the oil company’s shipping affiliate, are reducing the tankers’ crews to a minimum, according to a document seen by Bloomberg. At least 11 tankers are affected, and minimal staffing is hindering PDVSA’s ability to deliver on time, the document shows. Venezuela’s Oil Ministry and PDVSA officials declined to comment.

“Tankers are now delayed all the time,” PDVSA union leader Gregorio Rodriguez said from Puerto La Cruz.“The situation is worse in cities far from distribution centers, where the truck fleet service is also shaky, as is eastern Venezuela.”

Venezuela’s sliding oil production is exacerbating an already dramatic fiscal deficit, as the country is behind on almost $7 billion owed to debt investors and is handing over barrels of crude to settle outstanding loans.

A document written by PDVSA’s Commerce and Supply Security Department described poor working conditions and lack of security equipment, food or safe lodging on the tankers. Tankers Caura and Guanoco have no officers left on board; three other tankers are missing a first engineer; two other ships are now indefinitely anchored in Portugal and Bonaire.

Wages diluted by hyperinflation — now running at an annual pace of 187,400% according to Bloomberg’s Cafe Con Leche Index — are pushing personnel to leave the country, said Luis Diaz, a tugboat worker at PDV Marina in Puerto La Cruz.

“More than 100 employees, among them captains, officers, machine engineers and deck assistants, threatened PDVSA two weeks ago with mass resignation if they don’t fix our payscales,” Diaz said.

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NEW YORK CITY (Bloomberg) — The race to export U.S. shale oil overseas is about to get fierce, with at least nine proposed terminals angling for a piece of a very limited pie.

Within 18 months, new pipelines opening in the nation’s most prolific shale basin promise to carry an added 2 MMbpd to the Gulf Coast. But the extra crude will arrive at a time when existing terminals in the Corpus Christi area can already offer about 300,000 bpd of unused capacity.

Meanwhile, some of the terminals proposed are being designed to load a supertanker every other day, each capable of carrying 2 MMbbl. The result: It’s likely only one or two new terminals are needed, with the edge going to companies such as Enbridge Inc., whose Freeport, Texas, effort could be fed by two pipelines it already owns interests in.

“Anyone can build a terminal,” said CEO James Teague of Enterprise Products Partners LP, one of the first companies to export oil from the U.S., in a conference call last month. “But it’s what’s behind that terminal that determines its success.”

Or in other words, success in the terminal business is as much about securing the barrels as it is about shipping them out.

U.S. oil exports have soared to nearly 2 MMbpd since a near four-decade moratorium was lifted in late 2015, just as shale production kicked into high gear. Trafigura Group Ltd. and other trading houses have jumped at the opportunity to send those supplies to Europe and Asia.

But there’s been a problem: Pipeline shortages, particularly in the prolific Permian Basin, have limited how much oil makes it to the coast. Now, anticipating an end to those woes with three major new pipelines expected to open in 2019, several companies — including Trafigura — are lining up with plans to provide terminals that can take advantage of the change.

Enbridge hasn’t released many details on its proposal for Freeport, which is about 175 mi northeast of Corpus Christi.

But it would likely be fed by the company’s own Seaway pipeline system, which runs south from the U.S. storage hub in Cushing, Okla., as well as the Gray Oak pipeline it owns a stake in. Once completed, that pipe will run southeast from Midland, Texas, in the heart of the Permian, into Freeport and Corpus Christi.

To date, Singapore-based Trafigura is the only known company that’s submitted a formal permit application to build a deepwater terminal in the Corpus Christi area. The company’s Texas Gulf Terminals would move crude to a single-point mooring system a few miles offshore, where they would plan to load a supertanker every other day.

Drawing fire

But as the first out of the box, Trafigura is also the first to draw fire. The Port of Corpus Christi has hired a lobbyist to voice their concerns about the plan, according to the Caller Times newspaper. The proposal would include an onshore storage facility and a booster station, the newspaper reported.

The lion’s share of crude exports now leave from around Houston given the expansive network of inbound pipelines, storage tanks and dock space in the Houston Ship Channel. But that activity can also prohibit new growth, some say, with concerns about congestion limits.

That makes Corpus Christi, a steadily growing export hub, an attractive option. Many new Permian pipelines slated to come online are ending up there, pushing an infrastructure bottleneck from the shale play south. That ultimately builds a strong case for new terminals to be constructed.

Five proposals

Trafigura’s proposal is one of five for the Corpus Christi area that would rely on the three new pipelines coming online in 2019. They comprise the Plains All-American Pipeline LP’s Cactus II conduit, with a capacity of 585,000 bopd; Epic Midstream LLC’s EPIC line, with 600,000 bpd; and the Grey Oak line, owned jointly by Enbridge, Andeavor and Phillips 66, with about 900,000 bbl.

Beyond Trafigura, the other companies proposing terminals for the area include Magellan Midstream Partners LP, Carlyle Group LP, Buckeye Partners LP and Flint Hills Resources LLC.

For its part, Buckeye said that its marine terminal – a joint venture with Phillips 66 and Andeavor – will have storage capacity and connectivity to the Gray Oak pipeline. Meanwhile, Magellan has floated the idea of building its own pipeline from Cushing to Houston and then to Corpus.

Closely-held JupiterMLP, meanwhile, is following the path of Enbridge, proposing a terminal miles away from the Corpus Christi mash-up.
Brownsville, Texas

Its effort — in Brownsville, Texas, about 163 miles south of Corpus Christi — has no domestic crude pipeline connections. Instead, the company aims to build its own pipeline to the Permian Basin.

“The more congested it gets, the longer it takes,” said CEO Tom Ramsey of JupiterMLP. On the question of how many will succeed, he said “The number may be two or three, but you’re going to need more than one.”

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The perfect storm has hit the oil market.

That’s according to Spencer Welch, a director on the Oil Markets and Downstream team at IHS Markit, who made the statement in a CNBC television interview on Thursday.

“I think it’s been a bit like the perfect storm has hit the oil market,” Welch said in the interview.

“It’s not just the change in tone from the United States in terms of the sanctions, it’s the normal downturn in demand at this time of year because of turnarounds, refineries doing maintenance work, the U.S. has jumped up in terms of production, so I think a number of factors have hit the oil market,” he added.

The IHS Markit representative stated in the interview that oil demand’s growth is still going up strongly.

“Around 1.5 million barrels per day of growth this year, we expect a similar amount next year,” Welch said in the interview.

“However, there are some sort of concerns that are starting to appear, for instance the trade war between the United States and China,” Welch added.

“We’re expecting that to reduce Chinese overall economic growth by around 0.3 percent next year … All of that does have a little bit of a downward push onto oil demand. Oil demand is still growing but maybe the optimism is not quite as strong as it was,” he continued.

Welch has more than 20 years of downstream technical, operational and economic experience, according to IHS Markit’s website.

IHS Markit describes itself on its website as “a world leader in critical information, analytics and expertise to forge solutions for the major industries and markets that drive economies worldwide”.

Earlier this month, Tamar Essner, energy director at Nasdaq IR Intelligence, said in a television interview with Bloomberg that she thought the market was overreacting.

“Oil markets tend to easily overshoot to both the upside and to the downside,” Essner told Bloomberg in the interview on November 14.

“I think that there are a lot of traders in the market that are algorithmically oriented and they’re linked to factors that are agnostic to the fundamentals of oil. They’re linked to the currency market, the stock market and a lot of things that make this a psychological reaction prompted more so than the abundance of physical supplies,” Essner added.

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Saudi Arabia’s crude oil exports hit their highest in 20 months in September, while the Kingdom’s production in early November appears to have hit the highest on record, on the back of high customer requests made in early October when the market feared a hefty loss of Iranian supply this month.

According to data by the Joint Organisations Data Initiative (JODI) database, which collects self-reported oil figures from 114 countries, Saudi Arabia’s crude oil exports in September rose by 219,000 bpd from August to a 20-month high of 7.43 million bpd. This was the highest export level since the OPEC/non-OPEC production cut deal began in January 2017.

Saudi oil production stood at 10.5 million bpd in September, and Saudi Arabia also drew 93,000 bpd from its crude inventories to supply the market, run its refineries, and feed power generation plants.

The JODI data has a two-month lag, but more recent reports say that Saudi Arabia has pumped record volumes of oil in early November. Saudi Arabia’s crude production was between 10.8 million bpd and 10.9 million bpd earlier this month, industry executives tracking Saudi output told Bloomberg on Wednesday.

The very high production in early November was the result of extra volume nominations from Saudi Arabia’s clients. Those customers had made the nominations in early October, when oil prices rallied on fears that the U.S. sanctions would choke off a lot of Iranian oil supply in November. Saudi Arabia typically decides four to five weeks before the 1st of every month what its production will be, Bloomberg notes.

It’s not clear yet if the Kingdom will keep those very high production volumes through November and what the average November production will be. The current monthly record is 10.72 million bpd, set in November 2016, just before the start of the production cuts.

The U.S. waivers that came along with the sanctions on Iran totally erased the earlier fears of a supply crunch and flipped the market mood to expectations of oversupply, together with expectations of slowing global economic and oil demand growth.

Saudi Arabia has already said that it would be cutting December oil exports by 500,000 bpdfrom November and that OPEC may have to consider changing course and reduce production again.

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(Bloomberg) — Gas is in such hot demand in China right now it’s allowing a quirky market to flourish: transporting the fuel on trucks.

Call them pipelines on wheels. The country’s top suppliers are loading liquefied natural gas onto tanker trucks and delivering it to users to make up for insufficient pipeline coverage inland. The method is so effective ENN Group is using it as a primary way to move LNG from its new terminal.

This new kind of gas market has thrived in China over the past few years as the government’s blue-sky policies boosted demand for the cleaner-burning fuel faster than pipelines can be built to support them. It’s also unregulated, allowing nimble sellers to benefit from rising prices during peak consumption seasons, while the city-gate benchmark remains at government-set rates.

“We haven’t seen this kind of volume in trucked LNG anywhere else in the world” said Xizhou Zhou, head of China energy research for IHS Markit. “This market in China is a reflection of the market distortion caused by regulated city-gate prices, increasing supply and demand, and price volatility.”

ENN is betting this method of transporting LNG will endure. The distributor’s new terminal in Zhoushan, a tiny island at the mouth of the Yangtze River, is the first in the world built to load the majority of its imports onto trucks instead of reheating them to their gaseous state for pipelines or power plants.

The facility is designed to import about 3 million tons of LNG a year, with 2 million destined for trucks and the rest for pipelines. But trucking the fuel is expensive. It costs nearly six times more than piping it, according to a study by the King Abdullah Petroleum Studies & Research Center in Saudi Arabia.

More Lucrative

Companies like ENN are happy to take this pricier route because it can be more lucrative. Trucked LNG sells for about 4,500 yuan ($650) a ton. That’s two-thirds higher than benchmark Shanghai city-gate rates. Last winter, trucked LNG prices jumped to 7,400 yuan amid a nationwide gas shortage.

The rise of this free-wheeling market shows how China’s natural gas industry, long under the control of the government, is moving toward liberalization. The nation has taken steps toward a free market by auctioning off gas and import terminal space on exchanges, granting third parties access to assets operated mainly by state-owned giants, and revising its pricing mechanism.

Those efforts are also aimed at improving supply efficiency to meet the roughly 20 percent surge in demand. China’s unprecedented crackdown on its noxious smog by replacing coal furnaces with gas burners has become one of the most important factors shaping the global energy market.

Meet Targets

Trucks carried about 19 million tons of LNG to customers last year, accounting for 12 percent of China’s total use, Wood Mackenzie Ltd. estimates. For gas users with limited pipeline coverage, trucking allows them to get hold of supply and meet government’s switching targets, Wen Wang, an analyst at the consultancy firm, said by email.

Given its size, the trucked market could aid China’s transition toward a more market-oriented system. Eliminating gas pricing controls could help save as much as $2.2 billion a year, in part by reducing the use of more expensive trucking, Saudi Arabia’s KAPSARC researchers said in a May report.

“Trucked LNG is helping set the stage for further price deregulation,” Wang said. “As this slice of market grows, more and more users are exposed to market prices instead of regulated prices.”

With assistance from Aibing Guo, Jing Yang, Stephen Stapczynski and Sarah Chen. To contact the reporter on this story: Dan Murtaugh in Singapore at dmurtaugh@bloomberg.net. To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net Jasmine Ng, Aaron Clark.