For the first time in the last six years, Europe has overtaken Asia and become the largest consumer of US oil, writes “Bloomberg”.
–
–
Content will continue after the ad
Advertising
–
From January to May of this year, Europe has purchased an average of 213.1 million barrels of oil, and Asia – 191.1 million barrels, according to the latest data from the US Bureau of Statistics. The last time Asian volumes lagged behind Europe was in 2016, when the US lifted its crude oil export ban.
These changes in oil flow highlight just how significant Russian invasion of Ukraine has changed energy supplies, experts say. In an effort to cut off funding for Putin’s war, the US and other countries have imposed sanctions on Russian oil, which has led to an increasing number of European countries turning to the US for oil import deals, while Russia offers its oil at deep discounts to countries such as India and China. which have not introduced any sanctions against Russia.
As Europe seeks to reduce its dependence on Russian energy, these trade flows are likely to persist, according to Christopher Haynes, global crude oil analyst at Energy Aspects. US crude oil production is rising, but not fast enough to meet the needs of both Europe and Asia. Additionally, Middle Eastern volumes are limited in terms of how much they can send to Europe.
The largest producers in the region – Saudi Arabia and United Arab Emirates is already struggling to meet its OPEC+ production commitments under the agreement. Other suppliers such as Libyastruggling with political unrest that limits export volumes.
“All eyes will be on how OPEC will manage to increase its new production volumes next year and how much market share it can regain,” says “ESAI” analyst Elizabete Murphy.
–
