The recent spike in tanker rates is providing a mixed blessing for one of Africa’s emerging crude oil suppliers South Sudan.
Seaborne exports surpassed 160,000 barrels per day (bpd) in October for the first time since April 2019, according to IHS Markit.
“More than 80,000 bpd were loaded last month with destination China, but the world’s biggest importer’s market share in Sudanese shipments dropped below 50%, partially affected by the increased cost of transportation during the last month,” said Fotios Katsoulas, liquid bulk analyst for maritime and trade at IHS Markit.
Vessels observed loading South Sudanese crude last month comprised mainly aframaxes and a single suezmax tanker, according to Bloomberg data.
These included the 109,600 Maersk Promise (built 2006), the 105,700-dwt S-Trooper (built 2003), the 105,500-dwt Super Lady (built 2000), the 105,500-dwt Jag Leela (built 2011), the 158,600-dwt Nordic Breeze (built 2011), the 106,000-dwt Radiant Star (built 2005) and the 110,600-dwt Front Leopard (built 2016).
However, South Sudan crude has been shipped to the US with Lukoil importing 41,300 barrels into New Orleans in early November, according to Bloomberg data.
This is reported to be the first shipment of Sudanese crude to the US Gulf coast. The US is said to have last received Sudanese crude in June for PADD 5.
Separately, Katsoulas said South Sudan might start selling crude oil directly to its neighbours, after Ethiopia expressed its interest in an effort to avoid the increased cost of importing oil from the Middle East.
“Demand in the East African country continues to grow, but the higher cost of transportation cannot be ignored,” he said.
“With a population of more than 100 million people, demand for oil products has been increasing by more than 10% annually.”
The country plans to start importing cheaper refined oil from South Sudan instead of the Middle East, according to Ethiopia’s State Minister of Mines and Petroleum.
Meanwhile, Egypt recently signed a memorandum of understanding with South Sudan for cooperation in the field of oil and gas.
South Sudan Minister of Petroleum Awow Daniel Chuang has said that the country’s oil output has reached 178,000 bpd, with the hope of reach 250,000 bpd in “the near future”.
South Sudan has also announced plans for its first ever licensing round, which will be launched in the first quarter of 2020.
“This will put 13 onshore blocks for tender, with several international exploration and production companies having already expressed their interest,” said Katsoulas
South Sudan, which became independent in 2011, is rebuilding an economy shattered by five years of civil war in which almost 400,000 people died.
It is said to have the third-largest oil reserves in Sub-Saharan Africa, estimated at 3.5 billion barrels and much of the reserves being unexplored.
However, the civil war which erupted in late-2013 affected the country’s oil industry, with production declining from 350,000 bpd in 2011 to less than 130,000 bpd in 2014 amid soaring inflation.
