The Caribbean region is raising in popularity when it comes to crude export with tonne-mile exports doubling in volume since 2014.
In 2014, the region, including countries in Central and South America with a coastline on the Caribbean Sea or Gulf of Mexico, is expected to export 3.6m bpd of crude oil, or 10% of seaborne crude export volumes, Clarksons data shows.
“The major exporters of crude oil in the Caribbean region are Venezuela, Mexico and Colombia, who together are projected to export 3.3m bpd of crude oil in 2014. However, crude exports from the Caribbean have not risen during the last decade and are expected to decline 9% y-o-y in 2014,” Clarksons’ report reads.
” With a voyage distance of roughly 13,000 miles to China and 10,000 miles to India (compared to approximately 2,000 miles to the US), the growth in these shipments has boosted Caribbean crude tonne-mile exports significantly. Total crude tonne-mile exports from the Caribbean are forecast to hit 1109bn in 2014 (640bn more than in 2004), growing by a CAGR of 9.0% from 2004-14.”
As a result the demand for VLCCs, which are used to transport majority of crude from the region to China and India, has been boosted. However, the demand on traditional Panamax and Aframax trades to the US have been in decline, placing downward pressure on Aframax and Panamax demand in the region.
Clarksons believes that it is likely that China and India will continue to increase their share of crude exports from the region, thus supporting VLCC demand and further growth of Caribbean crude tonne-mile exports.