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Page added on October 11, 2018

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Donald Trump Is Rerouting the World’s Oil Tankers

Public Policy

U.S. President Donald Trump is redirecting global oil flows.

West African and Latin American producers are sending ever-growing volumes of crude to China. America’s exports to the Asian country have slumped in favor of its neighbors. There’s an urgent global need to find replacement barrels for Iran’s, whose exports might just collapse next month.

The thing that connects the shifting flows is Trump’s foreign policy. China’s slumping purchases of American crude — and its extra buying from elsewhere — have coincided with a trade war between the U.S. and the Asian country. Likewise, reimposed sanctions on Iran, which start Nov. 4, have increased the need for the type of heavy, sour crude that the Persian Gulf state sells.

Oil Change

U.S. flows to China collapse amid trade war, while rising for other buyers

Source: U.S. Census Bureau

“If you combine the impact of U.S. sanctions on Iran and the U.S. trade war with China, it is Trump’s foreign policy which is reshaping oil flows,” said Olivier Jakob, managing director of consultancy Petromatrix GmbH. “The U.S. is becoming a great energy power and they will use that, we are starting to see the implementation of that in different parts of the energy scene, part of that is being seen today in the oil flows.”

Oil markets are also grappling with record U.S. output, fueled by shale production, and America’s removal in late 2015 of longstanding crude-export limits. Those shipments — just a few hundred thousand barrels a day a few years ago — now consistently top an average of 2 million barrels a day each month. American crude increasingly flows to markets in Asia, Europe and Latin America, data from the U.S. Energy Information Administration show.

Shifting Flows

But there have been recent changes in precisely where those barrels are going. China, the world’s largest energy consumer, in August didn’t import any U.S. crude for the first time since September 2016, according to the most recent data from the U.S. Census Bureau. That compares with almost 12 million barrels in July, when China was the second-largest recipient.

Shipments to South Korea soared to a record 267,000 barrels a day in August — a 313 percent year-on-year increase, according to Bloomberg calculations from Census data. Volumes to Japan and India rose by 198 percent and 165 percent, respectively. Exports to the U.K., Italy and the Netherlands have also surged this year.

“The pattern of trade does look as though it’s going to ebb away from a focus on China to other Asian countries, and Europe,” said Caroline Bain, chief commodities economist at Capital Economics.

China is also increasingly turning to other regions. Colombian exports to the Asian nation rose fivefold in September, while Brazilian shipments hit their highest level this year. Chinese refiners bought 1.71 million barrels of crude a day from West Africa for October loading, the most since at least August 2011.

Sanctions’ Effect

It’s not yet clear to what extent, if any, China will curb shipments of Iranian crude due to U.S. sanctions. However, buyers in India, Japan and South Korea are reducing purchases from the Persian Gulf state. Saudi Crown Prince Mohammed Bin Salman said that the kingdom and other OPEC producers are making up for lost supply from Iran.

The demand for replacement crudes is apparent. Exports from Oman last month rose to their highest levels this year on healthy demand from China, Bloomberg tanker-tracking showed. Kuwait is directing more flows to Asia, while its shipments to the U.S. by late September all but dried up — the first time that’s happened since the Gulf War of 1990-91.

The curbs on Iran are having an effect on oil prices, with global benchmark Brent trading now trading near its highest level in four years. Oman was the talk of one of the oil market’s biggest gatherings last month, as its crude surged past $90 a barrel. Supertankers, which often benefit when trade flows are dislocated, are earning the most since early 2017.

Flows from Iran could drop by 2 million barrels a day, to below 1 million barrels day in November and possibly December, Energy Aspects Ltd. said in a report dated Oct. 1.

Whether it’s the need he’s created for replacement supplies from Iran, or other actions by the U.S, president, Trump’s policies are now having a direct impact on where oil is flowing, said Eugene Lindell, an analyst at JBC Energy GmbH in Vienna.

“What you can say beyond doubt is that it’s creating lots of exotic trade flows that hadn’t been in the market before,” he said. “It’s been a major influence that has forced a change in trade flows.”

bloomberg



37 Comments on "Donald Trump Is Rerouting the World’s Oil Tankers"

  1. makati1 on Thu, 11th Oct 2018 6:56 pm 

    “There’s an urgent global need to find replacement barrels for Iran’s, whose exports might just collapse next month.”

    Not going to happen! Then I read the article’s source. Bloomberg. US MSM propaganda source.

  2. Mark Ziegler on Thu, 11th Oct 2018 7:07 pm 

    If our Racist president would stop undoing what our previous president did the world would not be having these problems.

  3. makati1 on Thu, 11th Oct 2018 7:32 pm 

    If the Us minded its own business and stayed inside the 50 states, the world would have few problems.

  4. makati1 on Thu, 11th Oct 2018 8:18 pm 

    14 years and $1,000,000,000,000.00 and they still cannot build a plane that works.

    https://www.militarytimes.com/news/your-military/2018/10/11/dod-announces-global-grounding-of-all-f-35s/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+defense-news/home+(Defense+News+-+Arc+RSS+-+Home)

    For the small screen handicapped…

    “The Pentagon announced Thursday it is grounding its entire fleet of F-35s, just days after the first crash of an F-35B led investigators to suspect there is a widespread problem with the advanced fighter’s fuel tubes.” LMAO

  5. makati1 on Thu, 11th Oct 2018 8:21 pm 

    BTW: Same topic… “US may have by far the world’s biggest military budget but it’s not showing in security
    GAO report finds more holes than a Swiss cheese, and very little hope for improvement”

    https://www.theregister.co.uk/2018/10/10/gao_weapons_security/

    Slip slidin’…

  6. Anonymous on Thu, 11th Oct 2018 8:23 pm 

    1. US oil is being redirected from China to more at Japan and SK and Singapore. The Chinese are then getting the oil that was heading to those countries. This is a pretty minor redirection.

    2. Cutoff of purchases in AUG/SEP was because Chinese buyers were worried about possible tariffs by China gov. It looks like this is not happening. So now, China has already put in purchases in October. Takes almost a month to get oil to China but should see some US imports resume in OCT and then a substantial amount resuming in NOV.

    (IOW, it’s really not a big deal.)

  7. Ghung on Thu, 11th Oct 2018 9:14 pm 

    It’s an honor to have a President who throws shit at walls and doesn’t care much if it sticks or who it splatters on.

  8. makati1 on Thu, 11th Oct 2018 10:57 pm 

    In other news: “Financial conditions in China, which is at the center of an ongoing tariff fight with the U.S., have stayed “broadly stable” thanks to the central bank’s monetary policy easing, the IMF said….Adrian noted that, when looking at corporate debt or the non-financial sector credit, leverage levels in China had “stabilized.””

    https://www.cnbc.com/2018/10/10/trade-tensions-could-trigger-another-global-financial-crisis-imf.html

    The US will crash and burn. China will warm up and then move on, as always. Gold is a great conductor of ALL kinds of heat. China has many thousands of tons. Us may not have any. I think the emperor will be exposed soon. We shall see.

  9. Davy on Fri, 12th Oct 2018 5:35 am 

    Kicking the can down the road, huh billy!!

    Billy, tell me more about the BRIC bank and the gold back Yuan you always fantasize about.

  10. dave thompson on Fri, 12th Oct 2018 6:07 am 

    Trade war with China. Sanctions against Iran. Makes me wonder what this dog and pony show is covering up in the real world.

  11. deadly on Fri, 12th Oct 2018 6:30 am 

    If sanctions push oil to a hundred dollars, it will be great. Demand destruction will occur. Won’t notice so much until November when the sanctions kick in. Iranian oil shipments to northwestern Europe will end.

    Probably won’t happen, oilprice.com comments say it won’t, lots of wonkish analysis there. The build is high they say.

    Might as well send about 5000 wood chippers down to Florida and start running dimension lumber that is strewn from there to the Carolinas through those chippers. Going to have to ship every woodchip to a power plant and burn the pelleted former houses that Hurricane Michael shredded.

    Going to need some ships to haul the pelleted wood chips to the Drax power plant in England.

    Burning the shredded wood that was once houses is the only solution.

    Might as well make the best of a bad situation.

    Nice mess though.

    Even the Dow got hit by a selloff that looks like a hurricane made landfall on Wall Street too, it seems.

  12. Darrell Cloud on Fri, 12th Oct 2018 7:41 am 

    The American economic system for the last 100 years is a direct result of the FED. J.P. Morgan, et al. created a construct that separated the Federal Government from the tax base. With the unlimited lending power of the Fed, exponential growth of government, the rise of empire, and our unlimited wars were no longer constrained by the power of the purse that had been delegated to the House of Representatives. Corporate government became the central authority in America. Being able to fund itself, this corporation has known no real constraints.

    The fiat money created by the Federal Reserve completely displaced the Constitutional money of gold and silver. Having no actual tether to any real value, this currency can be debased into perpetuity. History has repeatedly demonstrated that this construct like all fiat money constructs will implode. The moment of that implosion will come like a thief in the night.

    China has been on an exponential growth paradigm since the mid 80’s. According to the tour guide who was taking me around Shanghai, Shanghai puts 20,000 new cars on the road every month. The Chinese demand for oil is insatiable. China is directly competing with the United States and Europe for world oil production. China will by any means necessary continue to direct the flow of oil to its shores. This exponential growth will at some point run up against the constraints of oil production. When that wall is hit, China will go the way of Japan.

    Trump is a symptom of the destabilization of the American economy and the resulting political unrest. Like all presidents over last one hundred years, he inherited the construct created by the Federal Reserve. If it unravels on his watch, political opportunists will blame him for the collapse and the ignorant will accept that explanation without blinking an eye.

  13. Twocats on Fri, 12th Oct 2018 9:11 am 

    Iranian production is down 250k in four months before sanctions. So yes it’s having an impact. Zero slack or deficit in supply for that time. If it persists another six months it will get serious.

  14. Richard Guenette on Fri, 12th Oct 2018 9:22 am 

    Bloomberg, just another MSM propaganda.

  15. Richard Guenette on Fri, 12th Oct 2018 9:29 am 

    China is no threat to the world. It has existed for many thousands of years and is a peaceful country. Unlike the US, China doesn’t meddle into other countries affairs.

  16. Anontarded1 on Fri, 12th Oct 2018 9:33 am 

    guys we have a new tard and it’s richardtard.
    he says china is a peaceful country but it seems they are taking over islands and redrawing map all over asia. plus they are all over africa. they have spies stealing supertards technology and it’s on the news on a daily basis. this guy is an alt-tard media fan.

  17. Here we go again on Fri, 12th Oct 2018 9:35 am 

    But the US has the SPACE FORCE Maki…

  18. Anontarded1 on Fri, 12th Oct 2018 9:50 am 

    guys, there’s a new space race and it’s full of supertards – my supertards. my supertard elon is up there.

    watch https://www.youtube.com/watch?v=EWBZ6l2QGdE

    don’t believe in the alt-tard media. believe in america supertards.

  19. joe on Fri, 12th Oct 2018 10:31 am 

    $100 oil? Sign me up. Last time it was up in the clouds it brought us the electrification of cars and the spreading of windpower all over the EU, it also brought the EU to ask Russia to build a piplines for gas. The long term consequence of Trumps oil policies will be to make oil an unreliable source of energy.

  20. Davy on Fri, 12th Oct 2018 11:56 am 

    “Bloomberg, just another MSM propaganda.”

    Another financial illiterate unable to digest financial news.

  21. rockman on Fri, 12th Oct 2018 3:04 pm 

    Some perspective is needed. China’s latest oil consumption: 400 million bbls per month Latest US oil exports to China: 16.9 million bbls per month. IOW US oil exports represented 4.2% of Chinese oil consumption. And average daily US oil exports during 2018 matched or exceeded any year in history.

    https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTEXCH1&f=M

    Sounds like a report made out of nothing significant. Must have been a slow news day. LOL

  22. rockman on Fri, 12th Oct 2018 3:18 pm 

    Richard – “Unlike the US, China doesn’t meddle into other countries affairs.” Except, of course, when it sent 300,000 soldiers across the North Korean border to attack US forces and almost pushed us of the peninsula. A little history of the “peaceful” Chinese involvement in the Korean war:

    https://en.wikipedia.org/wiki/Korean_War#China_intervenes_(October–December_1950)

  23. rockman on Fri, 12th Oct 2018 3:33 pm 

    Richard – You may also avoid mentioning the “peaceful” Chinese to any Vietnamese you run into. Having invaded and occupied their country at least 4 time over decades might not sit well too with them. Same warning if you meet some folks from India who had a little tiff wit China in 1962. LOL.

    https://en.wikipedia.org/wiki/Chinese_domination_of_Vietnam

  24. rockman on Fri, 12th Oct 2018 3:34 pm 

    Actually meant centuries…not decades. A rather long violent history.

  25. Richard Guenette on Fri, 12th Oct 2018 4:51 pm 

    Donald Trump is the worst President ever to exist.

  26. Fuck French Fags on Fri, 12th Oct 2018 5:40 pm 

    Dick the french fag you are the worst person to ever exist. Go get raped and dismembers by the “youths” of Eurape. ALLAH FUCKTARd

  27. makati1 on Fri, 12th Oct 2018 7:57 pm 

    rockman, what would the US do if China invaded Mexico and wanted to control it? Stand aside and watch? You can say the same about the US invasion of Vietnam.

    Perspective, always perspective.

  28. makati1 on Fri, 12th Oct 2018 8:04 pm 

    Davy, there is news and there is propaganda. Bloomberg is propaganda. I understand economics better that the so called educated economists who can only look in the rear view mirror and proclaim something happened AFTER it happened.

    I understand that the Fed is taking down the US economy on purpose. Where does that appear in Bloomberg? Show me.

    I have no interest in the market casino or the price of oil tomorrow. I know what is coming and am preparing for it. I don’t pretend that BAU is going to go on for much longer as most Americans do.

    The US is being deliberately leveled from the inside.THAT is reality, not some “news” from the US MSM Iron Curtain.

  29. I AM THE MOB on Fri, 12th Oct 2018 9:22 pm 

    Mak

    China legalizes Xinjiang ‘re-education camps’ after denying they exist

    https://amp.cnn.com/cnn/2018/10/10/asia/xinjiang-china-reeducation-camps-intl/index.html

    What a great country..

  30. makati1 on Fri, 12th Oct 2018 10:03 pm 

    MOB, what do you call schools in the US? Answer: education camps. You are “educated” by your government from kindergarten to a PhD in college, and you don’t even realize it. I had to pledge allegiance to the flag every morning in school. You stand for the National Anthem with your hand over your heart at every sporting event. THAT is “educating” (brainwashing) the masses to support the bullshit called America. And it works. Don’t “bend a knee” and see what happens. lol

    BTW: CNN, another propaganda outlet for your masters. If you Google the topic, all you get are Western/US propaganda sources for the accusation. Suck up that Koolaid!

  31. makati1 on Fri, 12th Oct 2018 10:05 pm 

    Meant “Bend a knee” and see….” Delete, “Don’t”

  32. makati1 on Fri, 12th Oct 2018 10:10 pm 

    “The Pledge of Allegiance to the Flag:

    “I pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands, one Nation under God, indivisible, with liberty and justice for all.”

    ,… should be rendered by standing at attention facing the flag with the right hand over the heart. When not in uniform men should remove any non-religious headdress with their right hand and hold it at the left shoulder, the hand being over the heart. Persons in uniform should remain silent, face the flag, and render the military salute. Members of the Armed Forces not in uniform and veterans may render the military salute in the manner provided for persons in uniform.”

    https://www.law.cornell.edu/uscode/text/4/4

    Brainwashing by any other name…

  33. I AM THE MOB on Fri, 12th Oct 2018 10:53 pm 

    Mak

    You don’t have to stand or say the pledge in America though..In China you have to or you will go to jail..That is the difference..

  34. makati1 on Fri, 12th Oct 2018 11:37 pm 

    Really MOB? And you know this because…? Did you tell that to the sports guys who knelt when the National Anthem was played instead of standing? They have endured a lot of shit for expressing their freedom. In reality, they have none, nor do you. you only think you do.

  35. Davy on Sat, 13th Oct 2018 4:57 am 

    “Davy, there is news and there is propaganda. Bloomberg is propaganda. I understand economics better that the so called educated economists who can only look in the rear view mirror and proclaim something happened AFTER it happened.”
    Billy you are the board propaganda machine so I would expect you to know all about propaganda. What you know little about is economics and your propaganda displays that daily.

    “I understand that the Fed is taking down the US economy on purpose. Where does that appear in Bloomberg? Show me.”
    Please, more of your nonsense. The FED is doing nothing but their mandate. Humans are taking their civilization down by doing what animals do that are allowed to go into overshoot. The FED is part of that process. You are not smart enough and too lost in your anti-American propaganda to understand that.

  36. Dredd on Sat, 13th Oct 2018 9:03 am 

    Sea level rise will win the seaport and oil tanker relocations effort (The Extinction of Robust Sea Ports – 10).

  37. Getty on Sat, 13th Oct 2018 2:34 pm 

    I’m doing all I can to fill the gap from Iranian crude being removed from the market…


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