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Opec resilient in keeping EU crude market share

26 Jun 2017 15:30 (+01:00 GMT)
Opec resilient in keeping EU crude market share

Barcelona, 26 June (Argus) — Although most Opec member countries have cut production this year, the group is managing to maintain market share of European crude imports.

In the first four months of this year, Opec countries took a 36pc slice of all European crude imports, up from a 32pc tranche in the same period in 2016, according to data from European customs bureaus. Total EU imports were just under 10mn b/d in April, up by 4pc on the year, with imports between January and April reaching 10.5mn b/d up by 7pc, as the EU posts consistent economic growth.

The main winner from Opec was Iran, which only resumed shipping crude to the EU in March 2016, following the expiry of US and EU nuclear-related sanctions. Iran shipped 525,000 b/d of crude to the EU in the first four months of this year, but its April shipments declined to 400,000 b/d, compared with 705,000 b/d in March. Libya has also exported more crude to the EU, shipping 415,000 b/d between January and April as some tentative stability returned to its oil loadings, this was well over double the amount exported in the same period in 2016. In April, Libya sent 350,000 b/d, up from 215,000 b/d on the year. Libya is exempt from the Opec output cuts because its production is severely constrained by the security situation.

Other Opec countries have lifted exports to the EU, including Kuwait, Algeria, Iraq and Venezuela.

Although Opec member Nigeria shipped a lower amount of crude to the EU between January and April — 580,000 b/d compared with 685,000 b/d on the year — it did export 640,000 b/d in April, up by 30pc compared with April 2016. This is the second month in succession Nigeria has boosted shipments to the EU, after a run of 13 months in decline. The French Mediterranean port of Fos is one destination which began receiving more Nigerian crude in April and should take receipt of at least four cargoes this month including one each of Forcados and Escravos grades. Nigeria is also exempt from cuts.

Non-Opec Russia remains the EU's biggest supplier, accounting for a third of all EU imports in the first four months of this year, and also in April. Russia shipped 3.3mn b/d to the EU in April, including 945,000 b/d shipped to the Netherlands, the highest amount for any month in the last six years. Despite this, Russia cannot displace Opec in dominating EU crude supply (see table). Russia is in a pact with Opec and is pledged to keep output 300,000 b/d down on a record high of October last year.

Of Europe's many smaller suppliers, it was the US that recorded smartly rising exports in April, hitting the second highest level on record behind October 2016. The US sent 135,000 b/d of oil to Europe in April, up from 40,000 b/d on the year. The biggest buyer was the UK, which took receipt of 75,000 b/d, ahead of Italy and Germany. The US sent 90,000 b/d to the EU in the first four months of this year, up from under 30,000 b/d in the same period in 2016.

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EU crude imports and Russia, OPEC market share mn b/d