In recent months, the global oil market has experienced notable shifts, particularly in the dynamics of dirty tanker flows from the Arabian Gulf (AG) to both Europe and the Far East/India. These changes are intricately linked to fluctuations in crude oil prices and projections of a tightening global oil supply.
Dirty Tanker Flows: AG to Far East/India vs. Europe
The chart above illustrates the dirty oil flow of the Arabian Gulf (AG) to the Far East/India and Europe, comparing data from 2024 (gray bars) and 2025 (blue bars). The trends indicate differences in demand and distribution patterns across these two key regions, with notable variations in early 2025.
In the Far East/India, oil flows in 2024 remained relatively stable, consistently maintaining high volumes throughout the year’s first half. The 2025 data, however, shows a noticeable decline in March, suggesting a potential disruption or shift in market demand. Despite this, the overall trend suggests that the Far East/India remains a strong and stable market for AG crude.
In contrast, the European market displays a more pronounced downward trend. While 2024 saw healthy and relatively stable volumes, particularly in January, February, and May, the 2025 data show significantly lower volumes across all available months. The most notable declines appear in March and potentially in April, where the 2025 volumes are considerably weaker compared to the previous year. This could indicate a shift in European energy policies, greater reliance on alternative suppliers (such as the US or Africa), or changes in refinery preferences. Additionally, geopolitical factors, sanctions, or economic slowdowns could be contributing to this reduction in AG crude imports.
Impact of Crude Oil Price Fluctuations
The crude oil market has been marked by volatility, influenced by geopolitical developments and supply-demand dynamics. As of March 19, 2025, Brent crude oil is trading at approximately $70.88 per barrel. This price point reflects a balance between supply concerns and demand projections.
The U.S. Energy Information Administration (EIA) forecasts that global oil markets will remain relatively tight until mid-2025. This projection is based on anticipated declines in global oil inventories, driven partly by reduced crude oil production in countries like Iran and Venezuela. Consequently, the EIA expects Brent crude oil prices to rise to about $75 per barrel by the third quarter of 2025.
Regional Strategies Amid Supply Uncertainty
In the face of potential supply constraints, the Far East, particularly China and India, has adopted a proactive approach. By increasing imports from the AG, these nations aim to bolster their reserves and mitigate risks associated with supply disruptions. This strategy underscores their intent to maintain economic momentum and energy security.
Conversely, Europe’s conservative posture reflects a wait-and-see approach. European markets appear to monitor the evolution of oil prices and supply conditions before making substantial procurement decisions. This cautious strategy may be influenced by economic growth concerns and the desire to avoid overcommitting in a volatile market.
Source: By Maria Bertzeletou, Signal Group