US replaces Africa as global oil swing supplier, consultant says

American crude grade WTI Midland has replaced West African oil as the swing supplier for markets between the Atlantic Basin and Asia, according to consultancy Renaissance Energy Advisors.

Exports of the grade have swelled by as much as 3.5 million barrels a day since the US lifted a ban on crude exports in 2015, according to estimates from the consultancy. About 47% of last year’s flows went to Europe while 43% went to Asia.  

“As US crude exports have grown, WTI Midland – a light sweet crude – has emerged as the world’s largest freely-traded grade by output and volume,” the London-based consultancy said in a note to clients seen by Bloomberg News. 

West Africa was previously the key swing supplier between Europe and Asia, offering a regular source of spot barrels that can be traded east or west depending on demand in each region.

The soaring supplies of American crude have shifted that role to WTI Midland, and this trend has been reinforced by Africa’s under-performing upstream sector. The startup of Nigeria’s Dangote mega-refinery also means more barrels are processed locally, and the giant plant is also importing WTI Midland, the consultancy said.

The dislocation in global crude flows stemming from the European Union’s embargo on Russian crude has also caused WTI Midland to effectively replace Urals as the baseload grade for northwest Europe’s refiners.

WTI Midland’s inclusion in the grades that are allowed to determine the price of Dated Brent — an important oil benchmark — has also elevated the position of the US Gulf Coast as a key center for oil pricing, the note said.  

The consultancy expects US crude exports to grow even further out to 2030, with flows set to reach almost 6 million barrels a day by 2030.