US’ April exports to Africa/India fall

US base oil exports to India and Africa slumped in April following an abrupt halt in the shipment of arbitrage cargoes to those markets.

Base oil exports of 59,340bl (8,360t) to India in April fell by more than 60pc from 152,850bl the previous month, government data showed.

Exports to Africa fell back to 135,130bl in April, down from more than 278,000bl the previous month. Exports of 21,500bl to Nigeria were down from more than 275,000bl in March.

Shipments to both those markets had surged earlier in the year as US producers cleared an overhang of supplies from late last year and early this year.

The surplus has now turned to balanced-to-tight supplies as US refiners focus on maximizing production of middle distillates.

The surge in US shipments to India during the first few months of the year enabled buyers to replenish stocks at competitive prices. The supplies gave them the leverage to turn down offers of supplies from other overseas producers at prices that they deemed to be too high.

The shipments to Africa had helped to balance out a slowdown in supplies from Europe and Russia.

Those two markets are typically the key sources of supplies for West Africa especially. Any pick-up in surplus flows from those markets to West Africa is unlikely anytime soon.

The cessation of arbitrage shipments from US to Africa now leaves that region with a dilemma over where to secure supplies to cover its requirements.