Europe-Bound Distillates Shipped Around Cape of Good Hope at Nearly 1M Tons
Nearly a million tons of Europe-bound jet fuel and diesel on 11 product tankers that loaded in the Middle East, Asia or India are seen diverting around the Cape of Good Hope so far this year, according to the OPIS Tanker Tracker. The voyage is up to 20 days slower than the quicker, conventional monthlong route via the Suez Canal through which ships transporting jet and diesel fuel to Europe from the Middle East and Asia usually sail.
Some 510,000 tons (4 million bbl) of jet fuel and 400,000 tons (2.98 million bbl) ultra-low sulfur diesel (ULSD) are tallied doing this voyage in 2016, based on information compiled from brokers, traders and vessel satellite tracking data.
"The longer voyage allows more time to find a buyer, or onshore storage space, and also provides a return from the higher-priced, later delivery date," the U.S. Energy Information Administration said in a Feb. 26 report on the phenomena.
"A lack of storage space and a large contango have pushed distillate supplies into floating storage and have encouraged import cargoes to take the longer shipping route."
Oil traders seen sending cargoes around Cape include Koch, Trafigura, BP, Castleton, Valero and Lukoil.
Three vessels still making their way to northwest Europe via the Cape include the Koch-controlled Maersk Privilege, with a 90,000-ton cargo of jet fuel arriving in the Italian port of Fiumicino on March 7.
The Alpine Confidence arrives in Amsterdam from Saudi Arabia on March 5, also with 90,000 tons of jet fuel, while 80,000 tons is on board the STI Connaught, arriving in Amsterdam on March 7 for Saudi Aramco's shipping arm ATC.
Helping drive shipments via this route are high onshore non-refinery gasoil inventories in the Amsterdam-Rotterdam-Antwerp trading hub.
Storage levels surpassed a record 6.3 million tons in mid-December, according to Genscape, based on data going back to August, 2012.
Stocks this week are nearly 4% lower than four weeks ago for diesel and 3% for jet, according to BNP Paribas. However inventories remain nearly 43% and 60%, respectively, elevated above five-year averages, said a report published today
from the French investment bank, citing data from PJK International.
One Saudi cargo of ULSD traveling around the Cape was observed diverting from Europe to New York, for use as low sulfur heating oil. The Raysut, signaling it will arrive in New York around March 7, loaded in the port of Jubail and is the first cargo observed making a Saudi-U.S. voyage with a gasoil cargo via the Cape.