The shifting dynamic between US crude/condensates exports heading to Asia vs. Europe is a key arb to watch going into 2021 and, for the rest of the year.
Notably in Europe, weaker crude intake from the region's refineries in early 2021, due to gloomier prospects for road fuel demand, is already depressing transatlantic flows, compared with those seen several months ago.
Notably Russian seaborne (excl. CPC) exports to Asia have been remarkably stable at around 1-1.1mn b/d since September 2020, compared to more volatile monthly shipments from MEG crude exports to Asia.
In particular, Chinese crude import demand and the evolution of OPEC+ production cuts will be played out across MEG-Russia crude export dynamics, meaning it remains a top arb to watch in coming months.