A fleet of huge, new built oil tankers are scheduled to ship diesel out of East Asia. Five very big crude carriers, that ship approximately 2 million barrels of oil each, are for the time being placed in the seas of China’s eastern and southern coasts. Two additional new-builds are to be added in the fleet. If all of the vessels were fully loaded, they would have what is currently held in Europe’s key trading hub of the Amsterdam, Rotterdam and Antwerp ports, according to Bloomberg.
Specifically, three out of seven VLCCs, the San Ramon Voyager, Ascona and Olympic Laurel, are already stored with 3.5 million barrels of diesel, according to Bloomberg, but are not fully loaded yet.
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Additionally, one is loading, one is voyaging to Singapore where it will take product and the other two are awaiting to leave their shipyards.
Mainly, Olivier Jakob, Director at Petromatrix GmbH in Zug, Switzerland stated that there’s a large volume coming at once, by the fleet.
Moreover, China is boosting output, with additional capacity coming online, at a time when local demand for middle distillates is helping to push products west. The first Chinese exports round were paralleled with an increase in diesel exports at the beginning of 2019.
On the contrary, independent gasoil and diesel stocks in ARA are experiencing their lowest records since 2014.
Also, the beginning of refinery maintenance season in Europe is stoking Western demand for the fuel.
Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas in London noted that
European demand conditions are quite favourable. It would make sense to try to move a lot of volume into Europe in short order to meet that demand.
Concluding, the boost in Asian exports reflects a rise in shipping of oil products, specifically diesel from India and the Middle East into Europe in recent weeks.
