<article><p class="lead">Norwegian crude exports edged down last month as lower demand in the Mediterranean and Europe more than offset increased shipments to Asia-Pacific. But Norway's 2020 exports as a whole were markedly higher than 2019's, thanks to a full year of output from the Johan Sverdrup field.</p><p>Official customs data show Norwegian crude exports averaged 1.51mn b/d in December, down by 4pc from the previous month. It takes the full-year average for 2020 to 1.48mn b/d, around a fifth higher than 2019. Last year's growth in exports was driven by Johan Sverdrup, which came on stream towards the end of 2019 and underpinned a 20pc increase in Norwegian crude production to 1.7mn b/d in 2020, according to the Norwegian Petroleum Directorate (NPD). </p><p>December's exports included 388,000 b/d to China, up by 23.5pc on the month. The start-up of Johan Sverdrup piqued Chinese interest in Norwegian crude, with shipments to China averaging over 260,000 b/d last year, nearly five times more than its intake during the whole of 2019. That trend looks set to continue. Tracking data show a steady flow of eastbound crude shipments from Norway this month, with at least 420,000 b/d of Johan Sverdrup departing for China during the first half of January. </p><p>In contrast, Norwegian crude exports to the Mediterranean saw a sharp decline last month, largely a result of new Covid-19 restrictions and the return of Libyan supplies. Shipments to Turkey dropped to zero last month from 74,000 b/d in November. </p><p>Demand for Norwegian crude from elsewhere in northwest Europe was mixed. The Netherlands and Sweden increased purchases by 37pc and 11pc on the month, respectively. But the UK — another key buyer — cut its intake by 24pc compared with November to 344,000 b/d. France and Denmark also reduced purchases in December.</p><p>Norway exported its crude at an average price of $51.62/bl in December— a premium of $1.90/bl to the North Sea Dated benchmark. </p><h3>More growth to come</h3><p>Norwegian crude exports could rise further this year if the NPD's forecast for a 4pc increase in production to 1.76mn b/d proves accurate — although the latest projection does reflect a downward revision from the directorate's previous 2021 estimate of 1.88mn b/d.</p><p>The NPD now forecasts that output will rise to 1.87mn b/d in 2022, down by 2pc from the guidance it gave last year. Next year's growth will mostly come from Johan Sverdrup's second phase, which will lift the field's capacity to 720,000 b/d when it comes on stream in the fourth quarter of 2022. After that, the NPD expects production to rise to 2.01mn b/d in 2023 and 2.07mn b/d in 2024 before dipping marginally to <a href="https://direct.argusmedia.com/newsandanalysis/article/2176928">2.06mn b/d in 2025</a></p><p class="bylines">By Riyan Zerrouki</p></article>
