Asia’s diesel exports to Africa are surging to nearly five-year highs, as Middle East’s sales to Africa crashed to nine-year lows amid threats to shipping and refinery outages, a Reuters analysis of ship-tracking data and volumes showed on Monday.
The Middle East conflict has made shipping of fuels, including diesel, to east Africa challenging, with ongoing security threats to tankers in both the Strait of Hormuz and the Bab el-Mandeb Strait. In addition, attacks by the Iran-aligned Houthis in Yemen on Saudi energy infrastructure have also crippled supply from Saudi Arabia, which accounted for as much as 40% of Africa’s diesel imports last year.
So refiners in Asia are expected to have sent up to 15 million barrels of diesel to Africa in August, the highest volume in at least four and a half years, according to the data Reuters has reviewed.
Asian supplies are set to partially offset the diesel exports from the Middle East to Africa, which are tracked to have crumbled to the lowest level in nearly nine years.
Before the war, Africa received around half of its diesel imports from the Middle East, which is the closest major fuel-exporting region to the African continent, especially its eastern coasts.
But this year, the closure of the Strait of Hormuz, the Houthi threat to Saudi shipments in the Red Sea and the Bab el-Mandeb Strait, and the Houthi attack on Saudi Aramco’s Jazan oil refinery on Red Sea coast, have reduced the volume of diesel that is freely flowing to Africa.
The Jazan refinery, for example, did not send any diesel to Africa in August, compared to 163,000 tons shipped in July, per data from Kpler cited by Reuters.
The East-West arbitrage remains wide open for Asian exports into Africa, and is likely to remain open as China is easing its fuel export restrictions and other Asian refiners increase run rates, analysts say.
By Tsvetana Paraskova for Oilprice.com
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