*

Middle East oil exports to Europe fell 22% in 2024, Kpler

data

shows

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US boosts global oil trade share to 9.5% with shale

production

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New refineries and pipelines alter global oil trade

dynamics

By Arathy Somasekhar

HOUSTON, Jan 7 (Reuters) - The volume of global crude

exports in 2024 declined 2%, the first fall since the COVID-19

pandemic, shipping data showed, due to weak demand growth and as

refinery and pipeline changes reshuffled trade routes.

Global crude flows have been roiled for a second year by war

in Ukraine and the Middle East, with tanker shipments rerouted

and suppliers and buyers split into regions. Middle East oil

exports to Europe declined and more U.S. oil and South American

oil went to Europe. Russian oil that formerly went to Europe has

been redirected to India and China.

These shifts have become more pronounced as oil refineries

have shut in Europe amid continued attacks on Red Sea shipping.

Middle Eastern crude exports to Europe tumbled 22% in 2024, ship

tracking data from researcher Kpler showed.

The shift in oil flows "is creating opportunistic

alliances," said Adi Imsirovic, an energy consultant and former

oil trader, citing closer relationships between Russia and

India, China and Iran that are reshaping oil trade.

"Oil is no longer flowing along the least cost curve, and

the first consequence is tight shipping, which raises freight

prices and eventually cuts into refining margins," said

Imsirovic.

The U.S. with its surging shale production has been a

winner in the global oil trade. The country exports 4 million

barrels per day, boosting its share of global oil trade to 9.5%,

behind Saudi Arabia and Russia.

Trade routes have also been reshuffled by startup of the

massive Dangote oil refinery in Nigeria, expansion of Canada's

Trans Mountain pipeline to the country's west coast, falling oil

output in Mexico, a brief halt in Libyan oil exports, and rising

Guyana volumes.

In 2025, suppliers will keep grappling with falling fuel

demand in major consuming centers such as China. Also, more

countries will use less oil and more gas, while renewable energy

will keep growing.

"This kind of uncertainty and volatility is the new normal -

2019 was the last 'normal' year," said Erik Broekhuizen, a

marine research and consulting manager at ship brokering firm

Poten & Partners.

FURTHER ROOM TO FALL

Changes in oil demand forecasts have pulled the rug out from

historical long-term oil market growth assumptions, Broekhuizen

said.

"In the past, you could always say that there will be

healthy long-term demand growth, and that solves a lot of

problems over time. That can't really be taken for granted

anymore," he said, citing weaker demand in China and Europe.

China's imports fell about 3% last year with gains in

electric and plug-in hybrid cars, and growing use of liquefied

natural gas in its heavy trucking. In Europe, lower refining

capacity and government mandates to reduce carbon have shaved

crude imports by about 1%.

NEW SUPPLIERS, NEW ROUTES

Europe's refiners initially cut Russian imports and

increased both U.S. and Middle Eastern oil purchases after

Russia invaded Ukraine. Attacks on ships in the Red Sea

following Israel's war on Gaza pushed up the cost of shipping

from the Middle East. Refiners stepped up imports from the U.S.

and Guyana to record highs.

Exports from Iraq declined 82,000 bpd and United Arab

Emirates exports fell 35,000 bpd in 2024. Europe added 162,000

bpd from Guyana and 60,000 bpd from the U.S.

Escalating Middle East conflict around late September

and fears of more sanctions from U.S. President-elect Donald

Trump led to tighter supply and higher prices of Iranian oil.

This prompted Chinese refiners to look at oil from West Africa

and Brazil.

NEW REFINERIES, PIPELINES

Nigeria's new Dangote refinery consumed enough domestic

supply to keep around 13% of Nigeria's crude exports in the

country in 2024, up from 2% in 2023, according to Kpler. That

cut Nigeria's exports to Europe, and Nigeria also imported

47,000 bpd of U.S. WTI, unusual for a major net exporter.

New refining capacity ramping up in Bahrain, Oman and

Iraq as well as Dos Bocas in Mexico are also likely to soak up

oil production in those regions.

In Canada, the expanded Trans Mountain pipeline can now ship

an extra 590,000 bpd to the Pacific Coast, lifting the nation's

waterborne exports to a record 550,000 bpd in 2024.

This has had a ripple effect: With increased Canadian crude

flowing to the U.S. West Coast, refineries in the region bought

less Saudi Arabian and Latin American crude, while direct

shipments from Canada to Asian countries have cut re-exports

from the U.S. Gulf Coast.

While China has been Canada's major buyer, the crude has

also found importers in India, Japan, South Korea and Brunei and

more Asian refiners are likely to purchase the oil, analysts

noted.

Trump's proposed 25% tariff on Canadian and Mexican crude,

the top two foreign oil suppliers to the U.S., could also change

oil flows in 2025, analysts said.