Empty supertankers have left Asia en route to the U.S. via the Cape of Good Hope in one of the biggest queue of vessels ever seen at sea, as Asian buyers rush to load U.S. crude to replace part of the supply lost in the Middle East.
“Tankers are forming what looks like a fleet, an unbroken line heading to the U.S.,” Kpler’s analyst Matt Smith has told Nikkei.
“The queue of VLCCs bound for the U.S. is the biggest we’ve ever seen, highlighting a squeeze in oil supply,” the analyst noted.
Asia is starved of crude as its biggest suppliers, the oil producers in the Middle East, cannot ship most of their crude through the Strait of Hormuz. Saudi Arabia has some wiggle room to boost exports via the Yanbu export port on the Red Sea, but the Kingdom was nevertheless forced to shut in some upstream production as Yanbu exports can’t offset all the losses at the Strait of Hormuz.
As a result of the crashing supply from the Middle East, refiners across Asia have turned en masse to U.S. crude supply and are now apparently sending an armada of tankers to bring that supply back to Asia within a few weeks.
North American crude has replaced Middle East flows in both Asia and Europe, according to energy consultancy Wood Mackenzie.
Middle East crude exports collapsed by nearly 60% in March, triggering “an unprecedented global energy realignment,” in which Europe and Asia are importing record volumes of North American crude, WoodMac says.
By Tsvetana Paraskova for Oilprice.com
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