In 2015, West African crude oil exports are estimated to have totalled 4.3m bpd, equivalent to 12% of global seaborne crude exports. However, West African crude exports accounted for 16% of crude tonne-mile exports last year following recent growth in long-haul shipments to China and India. However, developments during 2015 suggest that West African crude trade flows may be shifting again.
The Wild, Wild West
West Africa (WAF) is a key crude exporting region, accounting for 70% of total African crude exports. The major exporting nations are Nigeria and Angola, who together shipped 3.9m bpd of crude in 2015. The traditional WAF crude export route was to the US, with volumes peaking at 1.9m bpd in 2007, 43% of total WAF crude exports. Although WAF crude exports have been broadly steady for several years, growth in US shale oil production has shifted trade flows, as US imports of light, sweet WAF crude were displaced by US oil of a similar grade. At the same time, Chinese and Indian imports of WAF crude grew and in 2014 rose 10% to 1.6m bpd, equal to 37% of total WAF crude exports, whilst US imports of WAF crude halved to 0.3m bpd.
East, East, East
However, there was a shift in trends in 2015 as total Chinese and Indian imports of WAF crude fell, due to Chinese imports declining 9% to 0.9m bpd. This was partly due to greater competition from other light crudes from Russia, with Chinese seaborne imports of Russian crude up 72% in 2015 to 0.4m bpd. Meanwhile, Indian crude imports from WAF grew 12% to 0.6m bpd in 2015. This was partly supported by greater requirement from refiners for light crudes to satisfy robust domestic demand for lighter fuels.
A Return To The US?
Following a consistent decline from 2008 to 2014, US imports of WAF crude stabilised in 2015, largely due to the decline in US shale oil production on the back of low oil prices. US imports of West African crude have actually increased y-o-y every month since July 2015. However, crude volumes on the WAF-US route remain significantly below the 2007 peak, at just 0.2m bpd in full year 2015.
European Comeback?
Across the Atlantic, buoyed by low oil prices and improved margins, European refiners ramped up refinery activity in 2015 which supported total EU seaborne crude imports rising to 9.4m bpd. EU imports of WAF crude rose 5% y-o-y in 2015 to 1.4m bpd, as lighter WAF crude generally allows the relatively old European plants to more easily produce lighter fuels such as gasoline.
Whilst Asia remains a key destination for WAF crude, trade flow dynamics shifted in 2015, with US and Europe increasing imports. As a result, WAF crude exports in terms of tonne-miles only grew 2% last year, compared to 4% in terms of volumes. Nevertheless, the average haul of WAF crude exports remains longer than for any other major exporting region. The ability of West Africa to export on both longer-haul routes to the East and shorter routes to the West mean that shifts in West African trade flows remain key drivers of trends in global tonne-mile trade.
Source: Clarksons