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Thursday, November 15, 2018

Declining crude and oil product imports


Europe is the biggest trading area in the world for tankers. The first graph above shows that crude oil imports to Europe have declined marginally over the last couple of years. Oil imports from the North Sea have continuously declined this decade, from 3.6 mbd in 2000 to 2.8 mbd in the first half of 2007.


Imports from the Middle East have declined most strongly from 3.5 mbd in 2000, to 2.5 mbd in the first half of 2007, but had an upturn in 2005 and 2006. Imports from the Middle East account for about one quarter of total European crude oil imports.


The big increase comes in crude imports from the Former Soviet Union which have increased from 1.3 mbd in 1995 to 4.7 mbd in the first half in 2007 and which now account for about one third of total European imports.


According to Petroleum Intelligence Weekly (PIW), the U.S., the key engine of OECD oil demand growth, may be faltering, but economic growth in non-OECD countries is driving increasing consumption regardless of current record-high oil prices. U.S. oil consumption in the last four months was, according to PIW, well below last year, but China has re-emerged as a leading driver of non-OECD demand growth - Chinese oil consumption rose by 0.580 mbd in September from a year earlier and accounted for one-third of the robust 1.7% growth in global oil demand for September, compared with the same month in 2006. Preliminary data from PIW show that global oil consumption rose by 1.43 mbd year-on-year in September to an average 85.41 mbd. For the third quarter, the growth in global oil consumption was just 1.2%, or 1.03 mbd, down from 1.24 mbd in the second quarter, but up from just 0.345 mbd in the first, when a mild winter restricted demand. For the year as a whole, 2007 is on course for growth of 1.1 mbd, double last year's 0.550 mbd increase. In 2008, PIW is forecasting demand growth of a further 1.1 mbd.


According to the International Energy Agency (IEA), oil consumption in Europe will increase by 0.26 mbd to 15.63 mbd in 2007.


European product imports increased continuously from 1999 to 2006 (see second graph above) but have declined by about half-a-million barrels per day in the first half of this year. This is in line with the total average product imports to the OECD countries which, according to IEA figures, have declined by about 5.6% in the first half of 2007 compared to 2006.


The decline in product imports probably explains why the product tanker market has been so weak. U.S. gasoline imports have declined by 4% so far in 2007 compared to the same period in 2007, when they were at an all time high (1.2 mbd). Total U.S. product imports over the period (3.5 mbd) were 2% lower than for the same period in 2006.


The oil imports graph below is based on tanker tracking by Lloyd's Marine Intelligence Unit (LMIU), and thus does not include pipeline imports from the North Sea and Europe. It shows that oil imports to Europe have been fairly flat over the last few years, at around 4.5 mbd to the Mediterranean and 7.6 mbd to North West Europe.



Contact: Erik Ranheim