Crude from Colombia seen as best like-for-like replacement, IEA’s monthly Oil Market Report shows Europe, which imported 85% of Libya’s crude oil exports prior to the country’s civil war, was forced to look for unexpected long-haul oil supplies during and after the conflict, according to a special analysis contained in the International Energy Agency’s monthly Oil Market Report (OMR).
14 March 2012
As well as receiving 500,000 additional barrels of oil a day (kb/d) from Saudi Arabia, Nigeria, Iraq and Angola, Europe also turned to Latin America. By the end of the year 80 kb/d of Colombian oil was being imported to Europe whilst previously only small amounts had been supplied to European refineries.
One reason for looking so far afield was down to the kinds of sweet crude oil European refiners were used to receiving from Libya and their high yields of gasoline, low-sulphur diesel and jet fuel.
The significant additional Saudi and Iraqi crudes supplied were sour, and therefore not a direct replacement for lost Libyan supplies. This limited their use as a like-for-like replacement within many of Europe’s oil refineries.
The other reason was down to production problems. Although there would normally have been a number of replacements for the lost Libyan streams within the region, including North Sea crudes, many sites were hit by technical issues in 2011. “North Sea production was 350 kb/d lower in 2011 than a year earlier,” the OMR stated. This led to an increase in supplies of light, sweet crudes from Colombia.
Now that the conflict has ended and crude production is being ramped up in Libya, flows into Europe are once again looking similar to 2010. At the same time imports of Middle Eastern sour crudes, which helped Europe last year, have expectedly fallen back to their previous levels.
However, the OMR notes that even thought imports from Libya are growing they are still below pre-conflict levels. Consequently, European imports of light, sweet crude oil from Latin America remain above volumes from 2010, signalling that Europe is still on the look-out for high quality fuels.
The Oil Market Report (OMR) is a monthly IEA publication which provides a view of the state of the international oil market and projections for oil supply and demand 12-18 months ahead. To subscribe, click here.