The US decided to impose sanctions on two COSCO units, claiming that they were involved in transporting crude out of Iran. This increase tanker rates, making US Gulf Coast exporters to halt chartering COSCO-linked vessels, Reuters reports.
However, tanker rates had already started to grow after attacks on Saudi Arabia’s oil facilities during September. These attacks temporarily stopped Saudi oil production by over 5 million bpd, which translated to around the country’s output.
In addition, Reuters cited Ashok Sharma, managing director of shipbroker BRS Baxi in Singapore, who explained that the current situation is basically a combination of the attacks in Saudi Arabia. These attacks reduced oil capacity, meaning that recently less ships were fixed to discharge in the US Gulf Coast.
Moreover, US crude exports have risen as a decades-long ban was lifted in late 2015. Namely, the exports increased to an average 2.9 million barrels per day (bpd) during the first half of 2019, US EIA informs.
Today, the top regional destination for US crude oil were Asia and Oceania, amounting at 1.3 million bpd in the first half of 2019.