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Recent data by IHS Markit's Commodities at Sea suggests the
US has started increasing its imports from exporters across the
Americas and West Africa. Trade flows from Colombia, Nigeria,
Brazil and Angola have been strengthening during the last couple of
months, with May volumes expected to double for some producers.
This hasn't come as a surprise as the country seems to have quickly
switched away from Venezuelan barrels since February.
Loadings from Angola and Nigeria destined for the US expanded by
almost 80% in April month-on-month, having surpassed 300 thousand
barrels per day (b/d).
The other major provider of crude oil to the US, Iraq, further
increased its exports as well, with direct shipments from the
Middle-Eastern country having reached almost 400 thousand b/d in
April, with the summer driving reason expected to push these
numbers even higher in May. Flows from Saudi Arabia have been
strong as well, having more than doubled since March.
There have been no shipments from Venezuela to the US since
February, which has had a huge impact on global trade flows of
crude oil, with US oil imports driving changes elsewhere, as the
country has been absorbing more barrels from nearby exporters and
other major producers. This has been driven primarily by domestic
refineries previously relying on the heavy crude of Venezuela to
shop elsewhere for similar-grade crude, increasing the interest for
grades such as Colombian Castilla.
Meanwhile, April seems to have been a rather difficult month for
Venezuela, as some of its major customers since the US imposed
sanctions on the country's crude oil, like India and China,
squeezed their imports quickly. Shipments from Venezuela to India
fell dramatically in April, but only time will tell what might
follow, since India will have to replace another gap, the Iranian
barrels imported before May 2.
Elsewhere, oil prices fell sharply early this week, with Brent
pushed marginally below USD 70 per barrel. This followed US
President Trump's threat for higher tariffs on Chinese goods.
Another parameter supporting lower oil prices has been Saudi Arabia
announcing lower prices for oil exports to the US. This has brought
the oil market back to levels last seen a month ago, before any
geopolitical concern and signals that global supply is further
tightening pushed prices close to USD 75 a barrel.
Posted 08 May 2019 by Fotios Katsoulas, Liquid Bulk Principal Analyst, Maritime & Trade, IHS Markit
