U.S. President Donald Trump is redirecting global oil flows. West African and Latin American producers are sending ever-growing volumes of crude to China. America’s exports to the Asian country have slumped in favor of its neighbors. There’s an urgent global need to find replacement barrels for Iran’s, whose exports might just collapse next month.
The thing that connects the shifting flows is Trump’s foreign policy. China’s slumping purchases of American crude – and its extra buying from elsewhere – have coincided with a trade war between the U.S. and the Asian country. Likewise, reimposed sanctions on Iran, which start Nov. 4, have increased the need for the type of heavy, sour crude that the Persian Gulf state sells.
Oil markets are also grappling with record U.S. output, fueled by shale production, and America’s removal in late 2015 of longstanding crude-export limits. Those shipments – just a few hundred thousand barrels a day a few years ago – now consistently top an average of 2 million barrels a day each month. American crude increasingly flows to markets in Asia, Europe and Latin America, data from the U.S. Energy Information Administration show.