According to Sand’s research, China in August and September replaced its oil exports with West African crude from Nigeria and Angola.
“China can replace their U.S. oil exports with West African crude if they wanted,” said Sand. “We have gotten no indications if Western Africa is reaching their limit. This was the crude the U.S. used to buy before the shale revolution.”
For the oil tanker market, distances of the shipments matter more than volumes.
“Very large Crude carriers (VLCC) and Suezmax tankers can charge more for longer trade routes,” explained Sand. “When measuring the tonnes-miles (TM) exports of US crude oil to Asia it is a longer route than Western Africa to Asia. That means they will be negatively impacted.”
According to Bimco, Chinese traders have returned to purchasing U.S. crude oil in October but there is little visibility as to how much.