Middle East OPEC countries sending most of their production to Asia

Bloomberg/Fuel Fix:
OPEC’s quest to end a global crude glut already snapped a two-year slump in oil prices. Now attention is turning to how the group’s surprise decision to cut output will transform international trade flows of the world’s most important commodity.

The early signs are that Middle East suppliers will prioritize Asia, pushing competitors in Africa and the Americas to keep cargoes in the Atlantic region. Saudi Arabia has indicated it will initially maintain most flows to fast-growing Asia, while draining more heavily oversupplied Western regions. Kuwait is doing much the same.

“They want to keep their market share to Asia,” Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland, said of Middle East suppliers. “The routes they will restrict the oil flow most will be to the U.S. and Europe.”

Understanding how and where oil flows matters to almost everyone in the supply chain. Crude traders need to know as they exploit regional price gaps, tanker owners depend on the cargoes being transported over long distances, while many refineries are configured to run most effectively using specific varieties of crude.

If Middle East producers do indeed fight to keep their Asian market share, then higher proportion of crude pumped in West Africa, the North Sea, the Black Sea and the Mediterranean could stay within that region, according to Erik Nikolai Stavseth, a shipping analyst at Arctic Securities AS in Oslo.
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There is more.

This looks like good news for American producers who have beat back OPEC's price war.  It probably reflects a realization that with the Trump administration's less restrictive energy policy, the US will probably be buying less imported oil.  Drillers in Texas are already bringing new wells into production.

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