Viewpoint: Colombia to keep oil outlet diversification

Colombian crude export outlets are poised to continue expanding next year as state-owned Ecopetrol's years-long diversification strategy began to take hold in 2020.

In a year fraught with global energy hurdles, Colombian crudes managed to find new homes in Europe and Asia-Pacific even as Covid-19-related effects stifled demand there through 2020. Colombian crude continued to mostly be shipped to the US and China, but past clients also reemerged0.

About 38pc of Colombian crude exports between January and mid-December have been routed to the US, according to Vortexa. Roughly 15pc of the remaining barrels went to China. And about 31pc made their way to Panama as they sought further export to the US west coast or other Asian markets.

Other countries have increased their market share of Colombian crude this year. Most notably, India's share of Colombian crude exports rose to about 6pc this year, up from about 0.1pc a year earlier. The rise came even as Indian refinery capacity utilization shrank during the height of Covid-19 lockdowns. The increase could be rooted in a need for heavy sour crude for India's complex refining system amid volatile Venezuelan crude supply.

Spain, which in 2019 took no Colombian crude, so far in 2020 accounts for about 1.6pc of its exports with cargoes discharging in the Spanish port of Cartagena — a port that generally imports crude from Mexico, Egypt, Iraq, Russia and Venezuela. This year's intake could be attributed to lower Mexican crude production related to Opec+ agreements, or overall declining Mexican and Venezuelan crude production.

Also re-emerging this year as buyers were South Korea, Germany and Canada.

Colombia's first crude export to South Korea since 2018 arrived in October, making it only the fourth year the South American country has shipped crude there since it first did so in 2014.

At least four cargoes of Colombian crude have reached Germany this year, up from none in 2019 and 2018 — making Colombia the second-highest country source of crude after the UK as Venezuela ceded its number one spot from 2019 indicating that Colombian crude could be partially offsetting declining production from its neighbor.

Canada accounted for about 1.3pc of Colombia's 2020 shipments, up from none a year earlier, as shipments from various Colombian ports have departed for discharge in the port of Saint John. The Colombian crudes have departed its three major ports: Coveñas, Tumaco and Cartagena.

As uncertainty looms over Venezuelan crude production, Mexican crude output is likely to continue its downward trend, and Ecuador, which produces similar-quality crudes to Colombia, is expected to sign new oil-backed loans. Both of these factors could result in an opening in the global market for Colombian crude to continue to reach new destinations in 2021.

By Monica Rojas