Weaker oil demand growth in key consuming regions and reshuffled trade routes resulted in 2024 in the first decline in the world’s crude oil exports since the 2020-2021 pandemic-influenced slump, Reuters reported on Tuesday, citing ship-tracking data.
Global crude exports declined by 2% last year to 41.68 million barrels per day (bpd), down from 42.51 million bpd in 2023, according to data from Kpler cited by Reuters.
The decline in 2024 was the first since the period 2020-2021 when crude exports fell from 41.85 million bpd in 2019 to below 40 million bpd amid the slump in global demand during the COVID-19 pandemic.
In 2024, the shifts in crude flows due to the Houthi attacks on commercial shipping in the Red Sea affected global oil trade.
According to vessel-tracking data from Kpler, crude exports from the Middle East to Europe slumped by 22% last year, due to tankers avoiding the shortest route from the Middle East to Europe and opting for the longer route via the Cape of Good Hope in Africa.
The closure of some refining capacity also lowered crude demand at European refineries.
Elsewhere, China’s weaker-than-expected oil demand also played a role in the change in oil routes, and so did rising production from Guyana, Brazil, and the United States.
“Oil is no longer flowing along the least cost curve, and the first consequence is tight shipping, which raises freight prices and eventually cuts into refining margins,” Adi Imsirovic, an energy consultant and former oil trader, told Reuters.
The sanctions on Russia and Iran are also changing global oil flows and this “is creating opportunistic alliances,” Imsirovic said.
China continues to be the key and nearly only buyer of Iranian crude, while China and India are now Russia’s most important customers as Western sanctions, embargoes, and the price cap on Russian oil have shrunk the pool of potential buyers of Russia’s petroleum.
By Tsvetana Paraskova for Oilprice.com
