The US still imports crude oil but its crude oil exports are travelling further. In the long-term, crude oil exports might be dependent on the details in the 25-year US$400Bn crude oil for-who-knows-what deal between Iran and China
Now the US exports crude oil, it is often forgotten it is an importer, too. A reminder came with the news from tanker cargo data intelligence specialist ClipperData that the 2007-built, Sonangol-owned Suezmax tanker Sonangol Namibe has delivered the first crude import of Anyala light sweet crude from Nigeria to the US.
Sonangol Namibe offloaded 300,000 bbls of Anyala crude oil and 200,000 bbls of Brass River crude oil onto a barge that was pulled to Monroe’s Trainer refinery by OSG Horizon.
ClipperData also notes that refining activity on the US east coast rebounded above 700,000 barrels per day in recent weeks, the highest since the pandemic started.
Imports into Monroe’s Trainer refinery last month reached their highest level since March 2020, and imports are continuing to show strength again this month.
But overall, the US is a net crude oil exporter, notes BIMCO chief shipping analyst Peter Sand. So far this year, the US has exported 4.2M more tonnes than it has imported by sea, continuing the trend from 2020, which was the first full year in which the US was a net seaborne exporter of crude oil. In 2020, seaborne exports totalled 142.2M tonnes while seaborne imports amounted to 123.9M tonnes.
Tonne-mile demand generated by US crude oil exports has fallen by 9.7% in the first two months of 2021 compared to 2020, but the average sailing distance covered by a tonne of US crude oil exported to Asia has so far this year been 12,531 nautical miles. This is almost three times as high as the average sailing distance of exports to the rest of the world, which stands at 4,490 nautical miles, reported BIMCO.
In the medium term, the outlook for the tanker market is a little more favourable: OPEC+ has agreed to stick with its previous plan of slowly opening the taps in line with the perceived increase in demand as global Covid-19 lockdown restrictions ease. This should put more oil on the water as the glut of lower-priced crude sails around looking for a buyer.
The longer-term outlook for long-distance US crude oil exports to China is now dependent on China and the impact of the mammoth 25-year, US$400Bn Iranian crude oil sovereign deal. Iran will supply the crude oil and China will invest US$400Bn in infrastructure in Iran as part of Beijing’s Belt and Road Initiative.
An Iranian statement on the deal said, “Iran thanks China for its firm support for Iran’s opposition to ‘illegal unilateral sanctions’ by the United States."
The actual contents of the deal have not been released, so it is unknown if the sovereign deal includes the supply of Chinese military hardware or software to Iran or how much crude oil per month or quarter Iran is to supply China, or the pricing mechanism. With China rapidly building a fleet of new and also somewhat elderly VLCC tonnage, the impact on tonne-mile demand for non-Chinese owners and operators could be substantial.
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