In May 2022, a 51.4% month-on-month boost in seaborne crude imports from Russia helped to lift China’s total seaborne crude imports 8.7% for the month and 13% above 2021 levels for the same period, according to figures from shipowners’ association BIMCO, and that is just one of a series of changes in the seaborne oil markets
The numbers show a marked change, as China’s seaborne crude oil imports had been down 2.2% year-on-year in the period between January and end of April 2022, BIMCO said.
“Russian crude oil accounted for 13% of China’s seaborne crude import in May, up from 9% earlier in the year,” said BIMCO chief shipping analyst Niels Rasmussen. “Meanwhile, imports [of Russian crude] from Brazil, Saudi Arabia and Kuwait declined compared with April,” Mr Rasmussen said.
On average, Russia’s overall seaborne shipments in May 2022 hit 3.7M barrels per day (b/d), broadly in line with the level achieved since the beginning of April. China and India account for more than half of all the crude shipped from Russia.
“Russia will seek to increase volumes to India and China, and they are likely to replace volumes from the Middle East Gulf, Brazil and West Africa. Those volumes will instead move towards Europe,” said Mr Rasmussen.
According to BIMCO, this bodes well for crude tanker volume demand, noting that Aframax and Suezmax carriers in particular stand to gain from the market reorientation.
BIMCO expects the positive market for Aframaxes and Suezmax vessels because new trading patterns could offer both increased average sailing distances and higher levels of demand for these ships.
Mr Rasmussen said, “This is because they carry most of Russia’s exports as well as a higher share of volumes from the Middle East Gulf, Brazil and West Africa into Europe than into India and China.”
As the oil markets continue to shift, crude exports from the US Gulf of Mexico are replacing Russian volumes to Europe, as well.
Industry consultant Rystad Energy forecasts US Gulf of Mexico shipments touching 3.3M b/d in Q2 2022, topping the previous high of 3.2M b/d in Q2 2020 with data suggesting that 95% of exports are leaving from the ports of Corpus Christi, Houston, Beaumont, Port Arthur and Louisiana.
Changes in crude oil trade patterns are widely expected to accelerate throughout the remainder of 2022, especially toward the end of the year, as the EU’s ban of Russian oil and oil products is set to enter into force.
