South Korea became the largest long-distance importer of U.S. crude oil as the country’s oil exports hit a new all -time high in September, data from BIMCO, the world’s largest shipowner association, shows.
Specifically, South Korea imported 1.1 million tonnes of U.S. crude oil in September, its highest level ever. Similarly, the next top three overseas importers of U.S. crude oil, namely the United Kingdom, Taiwan (both at 0.94 million tonnes) and the Netherlands (0.74 million tonnes) all imported more in September than ever before.
The figures are being reported as China ceases imports of U.S. crude oil amid the brewing trade war with the U.S.
Namely, U.S. seaborne exports of crude oil to China in August and September dropped to zero, despite crude oil not being a part of the ‘official trade war’.
In 2017, Chinese imports accounted for 23% of total US crude oil exports. In the first seven months of 2018, the imported volumes almost matched last year’s figures reaching 22% before grinding to a halt in August following tit-for-tat tariffs.
“The trade war between the US and China is now impacting trade in both tariffed and some un-tariffed goods with both countries looking elsewhere for alternative buyers and sellers.
Tonne mile (TM) demand generated by total US crude oil exports has risen 17% from August to September, but is down 4.8% from the record high in July.
For the crude oil tanker shipping industry distances often matter more than volumes, with exports of US crude oil to Asia generating 74% of tonne mile (TM) demand in September, up from 70% in August,” Peter Sand, BIMCO’s Chief Shipping Analyst, says.
According to Sand, China has turned to West Africa to meet its demand for sweet crude.
US crude oil exports to Asia jumped in June and July, from a 43% share of total exports since the start of 2017 to reach a 56% share. That share was down to 46% in August, but climbed back to 51% in September.
The two other major importing regions are Europe (33%) and North and Central America (13%), while South America (2%), the Caribbean (1%) make up the rest, based on the figures for September.