Basrah crude exports to Asia surged through the summer, reaching a peak of just over 2mn bpd in August. Chinese and South Korean refiners propelled the overall 42% increase from the year-to-date low in April.
Flows to Europe and the Indian Subcontinent softened simultaneously. Indian refiners reduced their intake by 41% from April’s peak to September. European intake fluctuated, spiking in July before easing again.
Elevated VLCC freight rates through the summer deterred long-haul Basrah shipments to the US, where volumes plummeted from 247,000 bpd in April to just 33,000 bpd by September. These high rates also constrained flows to Europe. The July spike in European intake proved short-lived, with freight economics again weighing on demand.
Asian refiners, better positioned to absorb freight costs continue to pull barrels eastward.
