With Mexican crude exports expected to decline, a fierce competition is emerging between the U.S. and Europe for Guyanese oil, global trade data and analytics firm Kpler said.
Kpler analyst Matt Smith, quoted in a May 29 Argus Media article, said “Given the expectation of depressed Mexican crude exports going forward, the push and pull for Guyanese barrels between the U.S. and Europe is likely to be stronger than ever.”
Argus reported that the shift in the crude oil market comes as U.S. Gulf coast imports of Mexican medium sour Isthmus crude have significantly decreased. From March 1 to May 27, imports fell to approximately 135,000 barrels per day (b/d), down from around 220,000 b/d in the previous three-month period, according to Vortexa data. It said the decline has exerted downward pressure on rates for Aframax tankers since March.
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On the flip side, Argus said Guyanese crude exports to the U.S. Gulf coast are on the rise, potentially benefiting Suezmax crude tankers as a new export market develops for Guyana’s oil production. Kpler’s ship tracking data showed that Citgo’s 167,500 b/d Corpus Christi refinery in Texas received three one million barrel cargoes of Payara Gold in May.
Charterers prefer Suezmaxes, which can carry one million barrels, over smaller 700,000-barrel Aframaxes for transporting Guyanese crude.
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Argus said last year, U.S. Gulf coast refiners imported just two Suezmax-size cargoes of Guyanese crude. “The emergence of the U.S. Gulf coast as a new market would further increase Suezmax demand in Guyana, where tonne-miles this year through May 20 increased by 45% compared to the same period last year, and nearly fivefold compared to 2022,” the piece read.
Guyana has gained a larger share of Europe’s oil market last year. Guyana’s crude exports to Europe in the first semester of 2023 rose to some 215,000 b/d, or 63% of the country’s total exports of 338,254 b/d, according to Refinitiv Eikon data, as reported by Reuters. Exports to Europe accounted for about 50% of last year’s shipments.
Guyana’s rising output has allowed the Exxon consortium and the government, which separately markets its share of oil output, to funnel more to European refiners. The data showed that a large portion of the country’s crudes are being traded in Rotterdam, a key European oil hub.
