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Planning for Post-OPEC Cut Part 2: European Flows and Refined Product Price Trends

Minneapolis, MN | May 1, 2023 | By: Steve Sinos, Blue Lacy Advisors, LLC

Three Things

  1. Adding to our look at China/India and the initial OPEC announcement, we look at Europe to see how crude imports were trending before OPEC’s announcement and see stable flows for this time of year.

  2. OPEC+ was falling as a percentage of total waterborne imports, which was caused by Europe’s move away from Russian crude oil. For now, demand looks stable.

  3. But the data is sending mixed signals. Refined products, particularly diesel, are flashing signs of weakness that contribute to recessionary fears.

Crude Oil

March was a slow month for waterborne imports into Europe, with volumes dragged down by seasonal and political factors. Averaging just 8mm bpd, total crude waterborne imports were at their lowest of the previous year. For the first three weeks of April, however, these volumes appear to be rebounding and even growing. Through April 23, 2023, Vortexa estimates Europe took in an average of 8.7mm bpd, just under the three-month average for Dec-Feb. The sources of these barrels have changed drastically, YoY, though. OPEC+ as a % of total imports has fallen from a peak of 48% to just 36% of total waterborne imports, mainly because of the refusal of European buyers to accept crude directly sourced from Russia. Of the total 1.2mm bpd drop in OPEC+ barrels, Russian barrels represent 1.1mm bpd.

*This summary is based off April 23, 2023

A free excerpt, such as this one, will be published on a delay periodically. This is an excerpt from Blue Lacy Advisors, LLC's (“Blue Lacy”) weekly commentary for clients, which is based on a collection of models, research/analytical subscriptions, and bespoke work. Each week Blue Lacy explores how market drivers included in these analyses might affect or be used in clients' planning, budgeting, and execution of strategy. Call Blue Lacy to make an appointment today!


Meet the Author!

Phone: +1-832-413-3124

Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.

He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.

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