3 major groups of importers key to OPEC oil and tanker demand

Market Realist

An overview of crude tanker industry (Part 3 of 10)

(Continued from Part 2)

World major importers of crude oil

The world’s largest importers of oil include Japan, India, China, “Other Asia Pacific Countries”, United States and Europe. In terms of country, United States has historically been the largest importer of crude oil followed by China. In 2012, U.S. imported 8,491 thousand barrels of crude a day, while China imported 5,433 million barrels, based on data from BP Statistical Review.

Three major groups of importers

Investors can separate major importers into three groups: Europe, United States and China/India. This is because the Japanese market has been relatively stagnant over the years while “Other Asia Pacific Countries” are much dependent on China’s economic activity. The U.S. and European markets are weak and have stagnated over the past few years but is still important for crude tankers.

For exporters in West Africa, Europe and United States accounted for almost 30% and 20% of total oil export in 2012, respectively. Middle Eastern exporters’ exposure to these countries are less at 12% and 11%, respectively. The booming market and future growth for crude tankers is in Asia, where China and India accounted for almost 15% and 13% of Middle East’s total oil exports in 2012. “Other Asian Countries” was also quite important for Middle East, contributing to 22.26% of Middle Eastern exporters’ total shipments. For West Africa’s exporters, China made up ~23% and India contributed ~12% of total exports.

Indicators relevant to this characteristics

This means it’s important for investors to follow indicators for crude oil going into United States, Europe, Asia (China and India in particular). It would also be wise to track oil demand and inventory levels. Strong imports and demand for oil, as well as low inventory levels are positive for crude tanker stocks like Frontline Ltd. (FRO), Nordic American Tanker Ltd. (NAT), Tsakos Energy Navigation Ltd. (TNP) and Teekay Tankers Ltd. (TNK). It will also benefit the Guggenheim Shipping ETF (SEA). These will also be available on our website in more organized manner soon.

Continue to Part 4

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