VLCC voyage numbers decline in April following record March highs
The number of VLCC voyages dropped by 11% in April following record highs in March.
March's employment surge was driven by increased Middle East Gulf loadings bound for Northeast Asia and a rise in voyages from the Gulf of Mexico to Asia.
April saw a 50% reduction in long-haul US Gulf voyages to Asia due to less favourable arbitrage economics, diverting slightly more barrels to Europe on smaller vessel classes.
Despite the reduced rate of crude imports on VLCCs, China's onshore crude inventories are slightly building up after declines since August 2023.
A potential increase in crude purchases in China and wider Northeast Asia post-turnaround may boost VLCC demand in the coming weeks.
Venezuela shipments plunge after sanctions return
US sanctions on Venezuela's crude oil sales, re-imposed on April 17, spurred an exodus of tankers from Venezuelan waters.
Six large vessels departed without cargo in recent weeks, according to Reuters.
Venezuelan crude exports saw a 6% fall in April to 512k b/d from 543k b/d in March.
Vortexa data shows that India backed away from Venezuelan crude in April, after previously importing an average of 122k b/d while US sanctions were lifted during the period October 2023 to April 2024.
The US Treasury Department's refusal to extend a six-month oil sales license prompted companies to conclude their operations by May's end.
China issues second batch of oil product export quotas
China's second batch of oil product export quota totals 14 million tons, a 56% increase compared to the second batch quota of 2023.
The current year's oil product export quota for China stands at 33 million tons.
The quota is distributed to PetroChina 4.37 million tons, Sinopec 5.61 million tons, CNOOC 1.16 million tons, Sinochem 1.41 million tons, ZPC 1.22 million tons, NORINCO 180 thousand tons and CNAF 50 thousand tons.
Nigerian crude exports decrease as Dangote ramps up intake
Nigerian crude exports decreased to 1.15m b/d in April, from an average of 1.35m b/d over the past 12 months.
Dangote’s 650k b/d Lekki refinery was supplied with nearly 200k b/d of Nigerian crude in March and April, according to Vortexa. The refinery also received shipments of WTI from the US averaging 110k b/d over the same period.
The decrease is largely reflected in a 150k b/d drop in shipments to Asia in April.
Trans Mountain Pipeline expansion (TMX) begins commercial operations
The $34bn Trans Mountain Pipeline Expansion (TMX) began commercial operations on 1 May, all deliveries for shippers will be subject to the Expanded System tariff and tolls from this date. The first tankers are scheduled to load in mid-May, after line fill on the expanded system is completed.
890k b/d of crude, at full capacity, will be delivered to the Westridge Marine Terminal in Vancouver, Western Canada, giving Canadian producers access to the US West Coast and Asian markets.
Draft restrictions, limit Aframaxes to a maximum capacity of 550,000 barrels out of possibly 800,000 barrels that an Aframax can typically carry.
Last week Reliance, India’s largest refiner, purchased 2 million barrels of Canadian crude via the TMX pipeline from Shell for July delivery. Four Aframaxes will load the cargo before performing reverse lightering onto a VLCC for delivery into Sikka. Several Chinese firms have also purchased cargoes of Access Western Blend (AWB) and Cold Lake crude from the pipeline to be delivered to China in June.
Saudi Aramco increased June official selling price of Arab light
Over the weekend, state-owned Saudi Aramco raised the June official selling price of Arab Light crude for customers in Asia by 90 cents to $2.90 a barrel above the regional Oman-Dubai benchmark. This is the third consecutive month of price rises. Customers in Europe also saw increases in the kingdom’s prices for June sales, while rates for the US were largely steady.
The hike may indicate Saudi Arabia’s efforts to balance the market amid political tensions in the Middle East, concerns over China’s economy, and ample crude supplies from non-OPEC countries such as the US.
Asia is the biggest receiver of Saudi crude, receiving 81% of exports in the past year.