Global crude exports fell 2% in 2024, marking the first decline since the pandemic as trade routes are reshuffled amid changing demand.
Houston: So, it looks like global crude exports took a hit in 2024, dropping by 2%. This is the first time we’ve seen a decline since the COVID-19 pandemic. Shipping data shows that weak demand and changes in refineries and pipelines are shaking things up.
It’s been a wild ride for crude flows, especially with the ongoing conflicts in Ukraine and the Middle East. Tankers are being rerouted, and suppliers are splitting into different regions. For instance, Middle Eastern oil exports to Europe have dropped significantly, while more U.S. and South American oil is heading that way instead.
Interestingly, Russian oil that used to go to Europe is now finding its way to India and China. This shift is really changing the game, especially as some oil refineries in Europe have shut down due to ongoing attacks on shipping routes.
According to energy consultant Adi Imsirovic, these changes are creating new alliances in the oil market. Countries like Russia, India, China, and Iran are forming closer ties, which is reshaping how oil is traded.
With the U.S. ramping up its shale production, it’s actually benefiting from these shifts. The country is now exporting around 4 million barrels a day, which is boosting its share of the global oil trade.
Plus, new developments like the Dangote oil refinery in Nigeria and the expansion of Canada’s Trans Mountain pipeline are also shaking things up. These changes are affecting how oil flows from various regions.
Looking ahead, it seems like suppliers will continue to face challenges with falling fuel demand, especially in big markets like China. More countries are shifting towards gas and renewable energy, which could change the landscape even more.
As Erik Broekhuizen from Poten & Partners puts it, this uncertainty and volatility is becoming the new normal. The days of assuming steady long-term demand growth are behind us.
China’s imports have dipped, and Europe is also seeing a decline in crude imports due to lower refining capacity and government mandates aimed at reducing carbon emissions.
In response to the war in Ukraine, European refiners initially cut back on Russian imports and increased purchases from the U.S. and the Middle East. However, rising shipping costs from the Middle East due to conflicts have pushed refiners to look for alternatives.
Interestingly, Nigeria’s new Dangote refinery is now consuming a significant portion of the country’s crude, which has reduced exports to Europe. And with new refining capacity coming online in places like Bahrain and Iraq, we might see even more changes in oil production and exports.
Canada’s expanded Trans Mountain pipeline is also making waves, allowing for record waterborne exports. This has led to a shift in how refineries in the U.S. source their crude, impacting imports from Saudi Arabia and Latin America.
As we move into 2025, analysts are keeping an eye on potential tariffs that could change oil flows between the U.S., Canada, and Mexico. It’s definitely a time of change in the oil market!
