North Sea crude exports have proven resilient among global buyers in the midst of the covid-19 pandemic, as firm demand in Asia has overcome freight rate spikes and weaker regional demand, while the implementation of Opec+ productions cuts from May buoyed global demand for alternative medium sour grades such as the North Sea's Johan Sverdrup stream.
North Sea crude exports (outside of the region) by grade (light-medium-heavy/sweet-sour)
North Sea exports sustained in June
North Sea crude loadings out of the region rose to around 1.55mn b/d over April and May, from 1.25mn b/d in March, underlining solid appetite for the region's crude during the height of global lockdowns. North Sea crude exports in June so far (i.e. 1-24 June) stand at 1.43mn b/d.
The lion's share of those North Sea crude exports in June so far are heading to China, that is, close to around 500,000 b/d on a preliminary basis, underlining the viable arbitrage economics supporting longer haul purchases.
Meanwhile our data show that North Sea-origin crude in floating storage around the world has declined from 13.4mn bl on 1 June to 11.4mn bl, down around 20%, reflecting both weaker storage incentives and rising demand.
Chinese crude imports by region
Demand holds firm in China
Crude exports from the Mideast Gulf and West Africa to China decreased in May from strong outflows the previous month, coinciding with the Opec+ agreement coming into force. This lifted demand for competing grades from the North Sea, amid strong Chinese buying, including for storage.
Vortexa data show 23 VLCCs on the water loaded from the North Sea as of 24 June, with the majority on their way to Asia. What awaits them are congested ports and Chinese stockpiles - which would continue to support higher floating storage levels in the region in coming weeks.
Interested in a more detailed view of our freight data and associated flows?
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