June 2019 sees record high seaborne US crude oil exports

1.2 million t were shipped to China between 1 June and 30 June, up from 1 million t in May and worlds apart from no exports at all in the months of August through October in 2018 and again in January 2019.

“From being a very consistent and significant buyer of US crude oil until the trade war changed it all, China was back above a 1 million t in June 2019. As China stopped buying in August 2018, South Korea became the no 1 destination for US seaborne crude oil, taking 1.5 million t on average per month in 2019, and setting a record of 2.3 million t in June 2019.

From a shipping perspective, long-haul exports to Asia are great. As China retreated last year, India, Taiwan, Japan and Singapore stepped up alongside South Korea to keep the very long sailing distances around. Tonne mile demand was also record high in June” says Peter Sand, BIMCO’s Chief Shipping Analyst.

 

South Korea took over as main destination when China left

Taking 2.3 million t of crude oil from the US in June, meant that South Korea was the main destination, buying 19% of total seaborne US crude oil exports in that month. Even though it isn’t crude oil of the same characteristics, the growth in South Korean imports from the US comes at a time when it’s been cutting its imports from Iran significantly. South Korean imports from Iran are down from 1.2 million t in March to zero in May and June according to official statistics.

The same goes for India, which imported an average of 1.3 million t in March through June from the US, while cutting its Iranian imports sharply from 1.4 million t in March and April to zero in June. India used to be Iran’s second largest buyer of crude oil after China.

 

“Crude oil tankers enjoy higher tonne mile demand, when India turns to the US instead of Iran to source its need for crude oil. Geopolitical instability is often the main reason behind changes in the trade patterns of the oil tanker market. Despite growing tonne mile demand, crude oil tanker earnings have generally been lossmaking so far in 2019,” says Sand.

No other large-scale changes have appeared

While North and Central American seaborne imports were steady at 1 milllon t per month in 2018, 2019 has seen a gradual lift in crude oil imports from the US, to the countries in those regions. Peaking in April 2019 at 2.4 million t while falling back to 1.1 million t in June, the monthly average for the first six months of 2019 has reached 1.6 million t, up by 65% from 1H18.

With US crude oil exports increasing at a very high pace, one could easily be drawn to make faulty conclusions with regards to trade flows. But while export volumes of US crude to various regions have enjoyed double digit growth rates, trading partners have been the same.

Europe grew its imports by 52% in 1H19 compared to the same period in 2018, but this was simply a case of proportional growth in volumes to the increased total crude oil exports from the US. Europe’s share was at 31% of total seaborne US exports compared to 33% last year.

Same thing was witnessed in the case of North and Central America, which share-wise took the same amount as last year, but volume-wise were up 9.6 million t with an accumulated y/y growth of 64%. In this case, one single country can easily be singled out and that is Canada, which accounts for 84% of the 2019 imports into North and Central America.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/28082019/june-2019-sees-record-high-seaborne-us-crude-oil-exports/