Less oil from the Middle East and more oil from the Americas for Europe in 2024. New flows are emerging on the global map of black gold routes.
2024 brought many changes to the oil market. Particularly for routes used by ships. And that says a lot about economics and geopolitics.
A global figure first. Exports, at 41.68 million barrels per day in 2024, are down 2% over the year, according to figures from the world of commerce data analysis company Kpler, relayed by Reuters. A first since the pandemic (2020 and 2021).
It is above all the slowdown in demand, due to significant economies which are slowing down, which is behind this decline. In China, for example, imports fell by 3%. But the electrification of the automobile fleet and the transition to renewable energies also plays a role. This trend should also govern the market in 2025.
The new roads
The data shows that conflicts, one in Ukraine and the other in the Middle East, continue to have an impact on the world. Ships are taking other routes and suppliers and their customers are increasingly forming separate blocks. As opposed to a more open and globalized market, before.
For Europe for example: our continent is receiving more American oil (United States and South America) and less oil from the Middle East, in 2024. Russian oil which was previously intended for Europe is now leaving in China and India (but this was already the case in 2023).
Towards Europe
The reasons for these changes are not the same. The drop in crude oil exports from Middle Eastern countries to Europe is significant: -22%. It can be explained by attacks by the Houthis from Yemen in the Red Sea, where oil tankers leaving from the Arab-Persian Gulf pass to reach European ports. These attacks began at the end of 2023 and many companies have decided to no longer use the route. The only alternative is then to go around Africa, which takes longer and costs more. Another element which took place in this context (and which is self-influenced with the drop in imports): refineries have closed in Europe.
At the same time, US exports to Europe increased in 2024. Those from Guyana increased by 162,000 barrels per day and those from the United States by 60,000 barrels per day, reaching record levels in both cases. These increases more than cover the drop in Iraqi (-82,000 bpd) and Emirati (-35,000 bpd) imports. In total, crude oil imports into Europe are down by 1% in 2024.
Elsewhere in the world
The United States exports more and more oil. In 2024, their global market share reached 9.5%. At four million barrels per day, it is third in the world, behind Saudi Arabia and Russia. This increase in production is also a bearish element for prices, while OPEC+ countries limit production to push prices up in a context of falling demand.
Otherwise, China, the world’s largest importer, also turned to other suppliers at the end of the year. In a context of escalating tensions with Israel and the return to power of Trump (who attacked Tehran during his last term), Iranian oil saw its supply fall and its price increase. Beijing therefore obtained more supplies from Brazil and West African countries.
In summary: “Oil no longer circulates along the least cost curve, and the first consequence is reduced maritime transport, which increases freight prices and ends up reducing refining margins,” analyzes Adi Imsirovic, consultant. and former oil trader relayed by Reuterswho speaks of “opportunistic alliances” to describe these new flows.
New abilities
But it is not only geopolitical considerations that affect oil flows. There are also technical elements, such as starting up oil pipelines or refineries. In Nigeria, the huge refinery called Dangote began operations in December 2023. A greater part of Nigerian crude is therefore no longer exported (and the overall figure is falling, particularly to Europe) but transformed on site. . And the plant, which refines 500,000 barrels per day, also imports oil from elsewhere, including the United States.
In Canada, the west coast is now supplied by a new Trans Mountain oil pipeline, which runs from Edmonton in Alberta. It can transport 590,000 barrels per day. Canadian crude exports are therefore on the rise and will reach a level of 550,000 barrels per day in 2024, a record.
