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Editor in chief: Angelo Scorza
30/07/18 10:58

Italy increasingly coveting American crude oil

Libyan supplies' discontinuity is enhancing oil imports from the US

The relationship between American oil producers and Italian importers is getting stronger, in fact, being forced to cut imports from Libya, Italian groups are turning to the US.

As reported by Reuters press agency – Italian crude oil imports from the US has reached record-breaking figures last June and could soon break a new record.

“During the last 10 years crude oil import maps has drastically changed” told Ship2Shore Enrico Paglia, Research Manager at banchero costa.

“While China overcame the USA as leading crude oil buyer globally, the United States, supported by shale oil production, started a new business which helped them competing with Saudi Arabia and Russia  to become global leading producer of crude oil”.

American crude oil output grew from 5 million barrels/day in 2008 to over 10 million barrels in 2018, “and based on forecast – continues Paglia – production might exceed 12 million barrels/day within the next 2 years”.

Furthermore, considering the new output recorded by producing shale oil,  in December 2015, Washington Government, determined lifting the existing ban on US crude oil export introduced in the 70s to keep refined products prices low in the domestic market) giving the country the opportunity to be ranked among the leading crude oil exporter globally.

According to banchero costa Research Manager, “the Arabian Spring and the related instability which affected and is still affecting those countries definitely affected Italian crude oil import”.

Libya is tackling a particularly unstable political situation and the crude oil market is one of the mostly affected sector: last June armed groups attacked some crude oil fields and National Oil Company (NOC) was forced to shut down the major petroleum ports of the Country, Ras Lanuf and Es Sider, consequently losing at least 240,000 barrels/day export volumes.

“Due to the aforementioned reasons, Italy was forced to turn to other exporting countries, like   Azerbaijan, currently our leading supplier, Iran (the situation might change after latest American sanctions against Teheran; Ed) and the USA”.

America crude oil import has constantly soared during the last few months: based on EIA (Energy Information Administration data; Washington Government body, see chart) Italy imported 21,000 barrels crude oil/day in April 2017, while April 2018 reached 248,000 barrels/day.

As reported by Reuters (based on information gathered by Thomson Reuters and Kpler shipping intelligence firm) a new record was broken in June.

Regarding traffic and shipping lines, “American crude oil export is heading for Europe via Aframax and Suezmax, which essentially – concludes Paglia – are the same ships which served export from Libya”.

Francesco Bottino

TAG : Commodity