Asian diesel exports to Africa are expected to reach between 1.8 million and two million tonnes in August, marking a four-and-a-half-year high, Baird Maritime reported. This surge is attributed to African buyers seeking new sources after a decline in Middle Eastern shipments.
The opportunity for Asian suppliers arose after a reported US-Iran conflict disrupted Middle East exports. Additionally, the source noted that Iran-aligned Yemeni Houthis imposed a blockade on Saudi Arabia in the Red Sea and attacked Saudi Aramco's Jazan refinery, further impacting Saudi exports to Africa.
Middle Eastern diesel exports to Africa in August are estimated to be between 600,000 and 800,000 tonnes, the lowest in nearly nine years. This reduction is due to persistent shipping risks in the Bab el-Mandeb and Strait of Hormuz straits, according to Baird Maritime.
Last year, the Middle East supplied approximately 50 percent of Africa's diesel imports, with Saudi Arabia accounting for 40 percent of that volume. However, shipments from Saudi Aramco's Jazan refinery to Africa reportedly dropped to zero in August from 163,000 tonnes in July.
A decrease in refinery operations at some Saudi Aramco production sites, including Jazan, has further limited diesel exports, multiple trade sources indicated. Asian traders also directed more cargoes westward due to a wider east-west price spread in August.
The front-month east-west spreads widened to minus $135 per tonne in August, compared to minus $100 in July. An analyst from Energy Aspects suggested that East Africa would primarily need to continue sourcing barrels from Asia if Saudi tankers avoid Bab el-Mandeb due to security concerns.
