Atlantic Basin Crude Oil Surplus Bound for Asian Markets Says Report

MarineLink.com
Wednesday, December 04, 2013
Tankship bow view: Image in public domain

The growth in crude production in the Atlantic Basin will have a profound impact on regional crude supply/demand balances. According to PIRA Energy Group, a sizeable crude surplus will develop within the region, and crude will be forced to seek markets elsewhere, primarily in the rapidly growing countries in Asia.

The Atlantic Basin is broadly defined as including the Americas, Europe, and Africa. According to PIRA, refinery runs in these countries have declined in recent years after peaking in 2005-2007, but they are expected to slowly resume growth with increases in the U.S. and Latin America more than offsetting declines in Europe. (Crude production growth is being driven by the shale/tight oil “revolution” in the U.S. and increased oil sands development in Canada).

However, the projected growth in crude production is much greater than the increase in refinery runs. As a result, a sizeable crude surplus will develop within the region, and crude will be forced to seek markets elsewhere, primarily in the rapidly growing countries in Asia.

These changes are already beginning, say PIRA, with increasing volumes of African crudes no longer imported by the U.S. and instead moving to Asia. Also the former FSU and Latin America are actively seeking to expand sales to Asia, as are Canadian producers, which are looking to build pipelines to the Pacific Coast in order to export their crude to Asia.

PIRA postulates that as the Atlantic Basin moves from crude-short to increasing length, inter-regional crude differentials will also shift in order to allow greater movement of regional crude to Asia and discourage imports of Middle Eastern crude into the Atlantic Basin. Consequently, crude prices will be lower in the Atlantic Basin than in Asia-Pacific for comparable grades. The Brent-Dubai spread — a key measure of the relative incentive to supply Asian refineries from the Atlantic Basin (mostly African crudes) or from the Middle East — will stay narrower than it otherwise would have been.

Source: PIRA Energy Group

Maritime Reporter June 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Bahri to Buy Five More Oil Tankers from Hyundai Heavy

National Shipping Company of Saudi Arabia (Bahri) has signed a deal to buy a further five very large crude tankers from ship builder Hyundai Heavy Industries, the

DNV GL Holds Hearing of Ahead of New Rules Launch

More than 800 customers and stakeholders will receive the new DNV GL rules today as part of an external hearing process before their publication and entry into force.

A/S Trumf Bunker Joins KPI Bridge Oil Group

KPI Bridge Oil, a global broker and trader in marine bunkers, marine lubricants and risk management products, has announced the take over of A/S Trumf Bunker. A/S

Contracts

Crowley Takes Over Management of MSC Ships

Crowley strengthens relationship with U.S. Navy, completes turnover of Military Sealift Command T-AGOS/T-AGM fleet   Crowley Maritime Corp. announced its global

Union Vows More Channel Tunnel Disruption

Ferry workers will disrupt traffic through the sub-sea Channel tunnel between France and Britain for 48 hours from midday on Thursday, a union official said. "We

Statoil to Suspend Saipem Rig Contract

Norwegian oil major Statoil said on Wednesday it will suspend a rig contract with Italy's Saipem due to overcapacity in its rig portfolio. The suspension of

Tanker Trends

Bahri to Buy Five More Oil Tankers from Hyundai Heavy

National Shipping Company of Saudi Arabia (Bahri) has signed a deal to buy a further five very large crude tankers from ship builder Hyundai Heavy Industries, the

COSCO Receives Fund for Fleet Renewal

China COSCO Holdings Co Ltd says it has received ship scrapping subsidies for about 3.96 billion yuan ($638.71 million).    It came through China Ocean Shipping,

Team Tankers Appoints Hans Feringa as President and CEO

Team Tankers International Ltd has appointed Hans Feringa as new President and CEO. Feringa is the former President of Stolt Tankers, a division of Stolt-Nielsen Limited.

Energy

Bahri to Buy Five More Oil Tankers from Hyundai Heavy

National Shipping Company of Saudi Arabia (Bahri) has signed a deal to buy a further five very large crude tankers from ship builder Hyundai Heavy Industries, the

IRClass Offers EEDI Validation Service

IRClass (Indian Register of Shipping) has recently included Energy Efficiency Design Index (EEDI) validation to its service offerings. This is in response to the

Union Vows More Channel Tunnel Disruption

Ferry workers will disrupt traffic through the sub-sea Channel tunnel between France and Britain for 48 hours from midday on Thursday, a union official said. "We

Fuels & Lubes

First ME-LGI Engine Test Deemed a Success

Mitsui tests first commercial model on HFO and methanol   MAN Diesel & Turbo licensee Mitsui Engineering & Shipbuilding Co., Ltd. (MES) recently demonstrated

Bahri to Buy Five More Oil Tankers from Hyundai Heavy

National Shipping Company of Saudi Arabia (Bahri) has signed a deal to buy a further five very large crude tankers from ship builder Hyundai Heavy Industries, the

IRClass Offers EEDI Validation Service

IRClass (Indian Register of Shipping) has recently included Energy Efficiency Design Index (EEDI) validation to its service offerings. This is in response to the

Logistics

A/S Trumf Bunker Joins KPI Bridge Oil Group

KPI Bridge Oil, a global broker and trader in marine bunkers, marine lubricants and risk management products, has announced the take over of A/S Trumf Bunker. A/S

Union Vows More Channel Tunnel Disruption

Ferry workers will disrupt traffic through the sub-sea Channel tunnel between France and Britain for 48 hours from midday on Thursday, a union official said. "We

Statoil to Suspend Saipem Rig Contract

Norwegian oil major Statoil said on Wednesday it will suspend a rig contract with Italy's Saipem due to overcapacity in its rig portfolio. The suspension of

 
 
Maritime Contracts Maritime Security Maritime Standards Naval Architecture Pipelines Salvage Ship Repair Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1571 sec (6 req/sec)