The effects of Hurricane Laura, which made landfall on the US Gulf coast on 27 August, continue to be felt in the flows of energy commodities out of facilities in or near the path of the storm.
Persistently lower Black Sea crude loadings over July-September, compared to more buoyant export levels in the first half of the year, continue to weigh on the regional tanker market rates.
US crude loadings to China are en course to reach a 4-month high in September, as more bookings emerge along the route for October.
US crude exports fell slightly month-on-month in August, but are still up 20% from last year.
Utilisation rates for Very Large Crude Carriers (VLCC) fell to 44% in August, their lowest level this year following stymied global demand recovery for crude and a significant loss of cargoes compared to 2019 levels, according to Vortexa data.
Tightness in global heavy-sour crude markets has led to narrowing differentials for these grades against Brent in recent months, despite weaker demand sentiment in the overall crude complex in the wake of the pandemic.
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.
The failure of Opec and its non-Opec partners to extend joint production cuts from end-March, the subsequent deep reduction in Saudi Arabia’s official formula prices and pledges on the part of both Saudi Arabia and Russia to raise supply from April have kicked off a global battle for market share between the two nations.
Crude volumes heading to China in week 6 (w/e 9 February) held relatively steady amid limited on-the-water diversions. Vortexa also observed higher middle distillate and gasoline exports, as well as LPG diversions.
China’s seaborne crude imports are poised to maintain their momentum in November, Vortexa data show, after touching a multi-year high of over 10mn b/d in October.