U.S. Gulf Coast crude oil exports increased by 257 Mb/d week-over-week, totaling 24.7 MMbbl (3.53 MMb/d) according to RBN's Weekly Crude Voyager Report, marginally below the rolling four-week average (far right of dotted red line on chart below). This small uptick in export volumes stemmed from elevated demand in the Asia-Pacific (APAC) region with a hungrier appetite mostly from India taking 2.9 MMbbl after the prior week with no activity, which offset reduced European demand due to maintenance season. While private-sector refineries in India have adopted a more conservative procurement strategy recently in light of escalating trade tensions, state-owned companies such as the Indian Oil Corporation (IOC) and Bharat Petroleum have substantially ramped up offtake of U.S. crude.
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Helter Skelter - Changes Afoot in Sourcing of Crude for Asian Refiners
Production cuts by Saudi Arabia and other OPEC producers have had a profound effect on Asian refiners’ crude oil procurement by opening the door to more U.S., Canadian and North Sea crude deliveries to the Far East and South Asia. Of the four major Asian refining countries, China has seen the largest drop in imports of East of Suez crude, which includes oil produced in the Middle East, the Asia-Pacific region, Australasia and far-east Russia, but India, Japan and South Korea have experienced declines as well. What’s going on? And what does it mean for Atlantic Basin crude producers? Today, we discuss recent changes in global crude price differentials and Asian crude import slates, which include more imports from the U.S.
Return to Sender - Backhaul Economics Encourage U.S. Crude Shipments on VLCCs to Asia
In February 2016, two months or so after the U.S. lifted its crude oil export ban, prices hit their lowest point in the current down-cycle that began in the summer of 2014. The ongoing price collapse had contributed to the favorable political winds in Washington, DC that resulted in lifting the ban. But what was favorable in the political realm posed severe commercial difficulties: U.S. producers were stuck with trying to sell into an international market awash in crude. Facing adversity, though, U.S. exporters have been getting creative, with the latest strategy involving backhauls of U.S. crudes on the same ships delivering foreign crude to U.S. ports. In today's blog, ClipperData's Abudi Zein looks at the market conditions that make such crude flows economically rational.
If You Leave Me Now - The Impacts of Banning U.S. Exports of Crude Oil and Refined Products
U.S. gasoline and diesel prices have been sliding the past couple of months, but there's still a lot of angst among politicians and the general public about the cost of motor fuels — and who's to say prices at the pump won't soar again, spurring another round of proposed "fixes" to the markets for crude oil and refined products. Among the proposals floated when prices spiked this spring were bans on the export of U.S.-sourced crude, gasoline and diesel, the idea being that suspending exports would increase the supply available to domestic markets and thus bring down prices. If only it were all so simple! In today's RBN blog, we discuss the complicated ins and outs of oil, gasoline and diesel imports and exports, and the many effects of putting the kibosh on shipments to international markets.
