Data from the Crude Voyager report shows that eight Very Large Crude Carriers (VLCCs) exited the Gulf Coast the week ended August 4. Of these, six were bound for a port in Asia Pacific. So far this year, however, the Netherlands has been the most popular destination for VLCCs, which was expected after trade flows from Russia were disrupted by the geopolitical tensions in Eastern Europe. Of the 256 supertankers that have exited the Gulf Coast with U.S. oil so far this year, 58 were scheduled to the Netherlands. China was the second-most listed destination with 47 VLCCs, followed by South Korea at 40. Moving forward, we expect more VLCCs to go to Asia Pacific as the region continues to actively charter vessels from the U.S. to replace oil imported from Saudi Arabia after the country raised its prices for Asian buyers.
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One Week - A Record Seven Days for Gulf Coast Crude Exports, and a Lot More
The level of activity at crude oil export terminals from Corpus Christi to the Louisiana Offshore Oil Port (LOOP) is nothing short of extraordinary — a record 4.8 MMb/d was loaded the week ended August 25, according to RBN’s Crude Voyager report, and Houston-area terminals loaded an all-time high of 1.4 MMb/d. But there’s a lot more to the crude exports story. When you live this stuff day-in, day-out, you see subtle changes that often extend into trends and, if you’re lucky, you sometimes get signals that things you’d been predicting are actually happening. In today’s RBN blog, we discuss highlights from the latest Crude Voyager and what the weekly report’s data and analysis reveal about the global oil market.
Fear Inoculum - Oil Market Shows Concern, Not Panic, Over U.S.-Iran Face-Off
Fear about supply interruption isn’t the frantic force it used to be in the crude oil market. A deadly confrontation that might have pushed the U.S. and Iran to the verge of war raised the spot Brent crude oil price to above $70/bbl early in the week of January 6. Despite continuing regional concerns, the price quickly subsided. By January 13, Brent spot had fallen to $64.14/bbl, its lowest point since December 3. Before the Shale Era, a U.S.-Iranian face-off may well have launched Brent crude to well over $100/bbl as oil traders blew fuses over the heightened possibility of disruption to Persian Gulf oil production and transportation. There’s nothing like adequacy of supply, globally dispersed, to keep things calm — or at least calmer than they would have been if the U.S. and Iran had drawn so much sword a dozen years ago. In this blog, we’ll discuss where U.S. crude exports have been heading, how close the oil gets to strategically touchy areas, and whether the market still has reason to worry about disruption to oil supply.
Thank U, Next - South Korea Becomes Top Asian Destination for U.S. Oil After China Trade Spat
Between new sanctions on Iran and the potential for more escalation in the trade war with China, oil exports from the U.S. have been changing their flows dramatically in the past few months. China from October 2017 through July 2018 rivaled Canada as the largest buyer of U.S. crude; in June, when total U.S. exports hit a record 2.2 MMb/d, nearly one-quarter of those volumes flowed to China. But since trade tensions between the two nations intensified, not a single barrel of U.S. crude has arrived in China since July. Thankfully, the U.S. has found ways to fill the Chinese void by increasing the volumes sold to South Korea and India, two historically prominent buyers of Iranian oil. Today, we lay out the reasons why U.S. sanctions on Iran are helping the U.S. continue to sell crude to Asia, even as relations with China have chilled.
