The US Crude Oil Factor in the Tanker Market
The US crude oil export market is fast becoming a major one for tankers. In a recent report, shipbroker Banchero Costa said that “driven by the shale oil boom of the last decade, the United States have rapidly increased both the production and the export of crude oil and oil products. Seaborne crude oil exports from the USA reached 128.4 mln tonnes in 2019 (excluding domestic cabotage), based on Refinitiv ship tracking data. This was +46.9% up from the 87.4 mln tonnes of crude oil exported in 2018. Crude production and exports from the US are driving shifts to the global trade patterns – incremental US exports have largely moved to Asia and Europe”.
According to the shipbroker, “when the trade war between the USA and China escalated last year, the flows of trade has also shifted as a consequence. The primary destination for US crude is South Korea, with 19.1 mln tonnes in 2019. Such volumes represented a +106% y-o-y increase. South Korea is the destination of 15% of US seaborne crude exports. Exports have also surged to India, reaching 11.4 mln tonnes in 2019, up +121% y-o-y. India accounts for 9% of US seaborne crude exports. Another 7.3 mln tonnes were exported to Taiwan, an increase of +18.1% y-o-y. Exports to Mainland China declined by -44% in 2019 to 5.4 mln tonnes. Canada received 13.7 mln tonnes of crude from the US in 2019 (seaborne only), up +54% y-o-y. Volumes to the UK increased by +66% y-o-y to 11.3 mln tonnes, to the Netherlands by +89% to 10.5 mln tonnes, to France by +200% to 4.4 mln tonnes, and to Italy by +5.2% to 5.1 mln tonnes. Infrastructural restrictions at US ports are still biting”.
Banchero Costa added that “despite the relatively long-haul destinations, of the total 128.4 mln tonnes exported in 2019, just about 33 mln tonnes were shipped on VLCCs, about 27 mln tonnes on Suezmaxes, about 38 mln tonnes on Aframaxes, and about 30 mln tonnes on smaller vessels. Despite the media headlines, the country was still a net importer of crude oil last year. However, based on current trends this is likely to change in 2020. In 2019, total seaborne imports of crude oil to the USA amounted to 168.7 mln tonnes. This was -25.9% down from 227.6 mln tonnes in 2018. Here we have seen some extreme shifts in trade patterns. The largest seaborne supplier of crude oil to the USA remains Mexico, with 32.7 mln tonnes in 2019, or 19% of total US crude imports. Volumes have shrunk by a relatively modest -9.2% y-o-y. Imports from the rest of the Americas have largely increased in 2019 (except of course from Venezuela). Volumes from Colombia increased +8% to 12.7 mln tonnes. Imports from Brazil surged +51% to 8.3 mln tonnes, from Equador by +1.3% to 7.7 mln tonnes, from Argentina by +21.4% to 1.7 mln tonnes. However, imports from Venezuela to the USA crashed by -86% in 2019 to just 3.4 mln tonnes, from 24.1 mln tonnes in 2018”.
The shipbroker concluded that “what was perhaps more unexpected is that imports from the Middle East Gulf also crashed dramatically. Imports from Saudi Arabia to the USA were down -49.3% y-o-y to just 21.8 mln tonnes in 2019, compared to 43.0 mln tonnes in 2018. Volumes from Iraq to the USA were down -37.8% y-o-y to just 16.3 mln tonnes in 2019, compared to 26.2 mln tonnes in 2018. Imports from Kuwait were also down -26.6% y-oy to 3.2 mln tonnes in 2019”.
Nikos Roussanoglou, Hellenic Shipping News Worldwide