Brazil's Petrobras expects to be able to offer improved letter of credit (L/C) terms to Chinese refiners once its deliveries of crude cargo to bonded storage facilities begin.

The state-run oil producer is scheduled to commence deliveries of crude cargoes soon to bonded storage facilities it has leased at Qingdao port in China's eastern Shandong province.

Independent refiners

Brazil's top crude supplier Petrobras said in December 2018 that it had leased 400,000 cubic metres of bonded crude oil storage in Qingdao port.

The company says it took out the lease to provide better services to China's independent refining sector.

Improved L/C terms

The facility will allow the oil producer to sell crude in smaller lots to smaller customers, on shorter L/C terms or maybe on pre-payment terms.

The bonded facilities allow for the storage of goods before they go through customs clearance.

Brazil was the largest crude supplier to China's independent refineries in the first four months of 2019, according to Platts data.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.