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Saturday, December 16, 2017

The US oil imports is driving the tanker market

The above graph shows several interesting developments:

1.      US oil imports in the first part of 2004 are the highest ever, almost 3 mbd higher than they were in 1995 and, and some 9.2% above the level for the same period in 2003.

2.      The average oil import level since May 2003 has been consistently higher than in previous years, except for the last 4-week period ending 16 April when it was slightly under.

3.      Oil imports have in general been lowest during the first part of the year and highest in the period April to September.

A part of the increased US oil imports has been used to build up strategic oil stocks (SPR). Since January the commercial stocks have also been built up. However, whereas the SPR are the highest ever, the commercial stocks have shown a declining trend since 1991. The total stocks are the highest ever. Since the beginning of 2003 the stocks have been built up by 72 million barrels, which is more than 100 aframax loads.

The US takes its oil from a great variety of sources. The five largest in January this year were, according to PIW; Mexico (17%), Canada (17%), Saudi Arabia (15%) and Venezuela (14%). This means that less than one VLCC (0.7) goes from Saudi Arabia to the US every day. But the distance is very long and 1.4 mbd exported from Saudi Arabia to the US produces some 65% of the total tonne miles produced by the 4 mbd exports from the Persian Gulf to Japan. The 0.7 VLCC from Saudi Arabia actually produces some 11% of world total crude oil tonne mile demand per year, which demonstrates the importance of US oil imports for the tanker market. The US oil import from Mexico of 1.7 mbd only produces some 1% of world tonne mile demand, assuming that 70% goes to the US Gulf and the remainder to the New York area.

Tonne-mile demand for some tanker routes:

Distance AG- LOOP

1,000 bn TM

%

Persian Gulf  - LOOP via Cape

12,225

609

7.7%

Persian Gulf  - Japan via Malacca

6,589

328

4.2%

Nigeria, Bonny – Houston

6,166

307

3.9%

Mexico, Cayo Arcas - New York

1,838

92

1.2%

Mexico, Cayo Arcas - Houston

619

31

0.4%

World tonne-mile demand 2003 according to Fearnleys

 

 

100.0%

It is not only US crude oil imports that are record high.  US gasoline imports for the week ending 16 April amounted to 1.13 mbd, the highest ever.  Imports for the period January to 16 April 2004 were 0.6 mbd above that in the same period in 1995.  The US distillate imports this year of some 0.4 mbd have only been slightly above the imports for the period last year.  The US is projected to increase total oil demand by 0.28 mbd to 20.35 mbd in 2004, the year when world oil demand will pass the milestone of 80 mbd. 

Contact: erik.ranheim@intertanko.com