US Refiners Boosting Fuel Trade With Africa as Wars Crimp Supply

p[irpk7(niaikfdjo[2(wch}_media_dl_1.png Vortexa

Article content

(Bloomberg) — US oil refiners are increasing diesel and gasoline shipments to Africa as the continent struggles to cope with supply disruptions from the wars in Iran and Ukraine.

Article content

The surge in cargoes from fuel makers in places like Texas and Louisiana has been so strong that the US has become one of South Africa’s top sources of gasoline and diesel, according to data from energy analytics companies Vortexa and Kpler. It’s a significant shift for a nation that typically relies on the Middle East and India for such fuels.

Article content

Article content

Article content

Other African nations including Cote d’Ivoire and Namibia also are leaning on the US to replace shipments formerly delivered by India, Russia or Persian Gulf refiners. Indian supplies have been crimped as the Iran conflict throttles trade from that region while Russia has been beset by Ukrainian attacks on refineries that prompted the Kremlin to restrict fuel exports.

Article content

Article content

Africa may be emerging as the “marginal market” for US refiners, which are running at maximum capacity to satisfy demand, said Susan Bell, senior vice president of downstream research at Rystad Energy.    

Article content

South Africa is on pace to absorb more than 5 million barrels of US diesel since the Iran war began in late February, along with 400,000 barrels of gasoline, Vortexa data showed. That amounts to a “truly unprecedented” trade flow, Bell noted. 

Article content

In March alone, diesel shipments to Africa’s second-largest economy reached 1.8 million barrels, higher than any full-year totals in records going back to 1990, according to the Energy Information Administration.

Article content

That fits in with a broader global dynamic that’s seen the US become the swing supplier of crude oil. Total exports of crude and refined products are hovering near record highs, eroding domestic stockpiles that include the Strategic Petroleum Reserve.

Article content

Article content

In Cote d’Ivoire, imports of US motor fuels have increased seven-fold from a year ago, according to Vortexa data. Although the West African country doesn’t rely much on Persian Gulf refiners, American cargoes are plugging the gaps from limits on Russian shipments and reduced deliveries from Europe. 

Article content

Shipping US Gulf Coast diesel to West Africa has been profitable since March, said Nikolas Plonski, oil market analyst at Sparta Commodities. That owes both to lost Middle Eastern supplies and fewer shipments arriving from Russia and India, he said.

Article content

“That combination has kept the pull on US barrels stronger for longer than would typically be the case,” Plonski said. 

Article content

Even Namibia is tapping US fuel makers, drawing 1.7 million barrels of diesel since March, according to Vortexa.

Article content