In January, U.S. crude oil exports to Asia fell to 1 million barrels per day, marking the lowest level in more than two years. This decline was attributed to elevated freight rates and the availability of more competitively-priced Middle Eastern oils, which resulted in reduced shipments, Reuters highlights.
As informed, a surge in supertanker freight rates at the beginning of the month made shipping to Asia, especially to China, costly. China, the largest global crude importer, experienced a decline in U.S. oil exports to 190,000 barrels per day, the lowest in 13 months.
Overall U.S. oil exports dropped to 3.8 million barrels per day, the lowest in a year. January typically witnesses weaker exports as onshore inventories rebuild after a seasonal outflow in December.
According to Reuters, despite turmoil in the Red Sea, U.S. imports of Middle East crude remained unaffected, with many shipments rerouting around Africa’s Cape of Good Hope instead of taking the Red Sea route. February is expected to see an increase in U.S. exports to 4.4 million barrels per day, driven by competitive prices of U.S. light sweet crude against North Sea and West African grades.
However, exports to Asia may remain subdued due to the higher cost of U.S. West Texas Intermediate crude compared to Abu Dhabi’s Murban crude. Saudi Arabia’s decision to maintain the March price of its flagship Arab Light crude to Asia at a more than two-year low is anticipated to put pressure on U.S. crude prices.
