An overview of the crude tanker industry

Part 3
An overview of the crude tanker industry (Part 3 of 10)

3 major groups of importers key to OPEC oil and tanker demand

The world’s major crude oil importers

The world’s largest importers of oil include Japan, India, China, other Asia Pacific countries, the United States, and European countries. By country, the United States has historically been the largest importer of crude oil, followed by China. In 2012, the U.S. imported 8,491 thousand barrels of crude a day, while China imported 5,433 million barrels, based on data from BP Statistical Review.

Crude Oil Importers 2013-12-23Enlarge GraphThree major groups of importers

Investors can separate major importers into three groups: Europe, the United States, and China with India. This is because the Japanese market has been relatively stagnant over the years, while other Asia Pacific countries are much more dependent on China’s economic activity. The U.S. and European markets are weak and have stagnated over the past few years, but they’re still important for crude tankers.

Europe and United States accounted for almost 30% and 20% of West Africa’s total oil exports in 2012, respectively. Middle Eastern exporters’ exposure to these countries is less, at 12% and 11%, respectively. The booming market and future growth for crude tankers is in Asia, where China and India accounted for almost 15% and 13% of the Middle East’s total oil exports in 2012. Other Asian countries were also quite important for the Middle East, contributing to 22.26% of Middle Eastern exporters’ total shipments. For West Africa’s exporters, China made up ~23% and India contributed ~12% of total exports.

Indicators relevant to these characteristics

This means it’s important for investors to follow indicators for crude oil going into the United States, Europe, and Asia (China and India in particular). It would also be wise to track oil demand and inventory levels. Strong imports and demand for oil, as well as low inventory levels, are positive for crude tanker stocks like Frontline Ltd. (FRO), Nordic American Tanker Ltd. (NAT), Tsakos Energy Navigation Ltd. (TNP), and Teekay Tankers Ltd. (TNK). They will also benefit the Guggenheim Shipping ETF (SEA). These drivers will also be presented on our website in a new and more convenient design in the new year.

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