Faced with depleting demand from its biggest oil buyer, the United States, Colombia is reportedly seeing itself having to expand its horizons to more distant markets such as Asia and Europe.
In 2013, Colombia’s oil industry witnessed its first decline in exports to the US after six years of flourishing trade, forcing it to diversify its clientele to farther countries, Colombian economic newspaper Portfolio reports.
Between 2006 and 2012, the tailoring of crude oil composition to US requirements had boosted Colombia’s external sales by 200%, hitting a high of 403,000 barrels per day, according to Portafolio.
Nevertheless, the US Energy Department’s Energy Information Administration (EIA) recorded a 6.5% decrease in exports by November 2013, the first negative statistics in six years.
Portafolio attributes the fall in figures to the changing tastes of refineries and a growing attempt for the US to be more self-sufficient with petroleum. While the North-American country had previously preferred Colombia’s blend of crude oil and naphta in varieties like Castilla or Vasconia, its demand has now shifted to heavier raw products provided by countries such as Canada and Mexico, as these can be mixed by the increasingly available US offering of light and condensed crude oils.
“The demand for Latin-American crude [oils] in the US has declined, and has been replaced for cheaper crude [oils] from Canada,” a petrol tradesman told Portafolio.
“But Colombians have lost their market faster because of quality issues.”
While the heads of state of competing South-American oil producers Venezuela and Ecuador made an early run for it by sealing deals for crude oil trade with China, Colombia did not opt for these pre-emptive tactics and may now suffer because of it.
The reason being, Portafolio explains, that Colombia’s exported crude oil blends are currently designed in accordance to US demands. Reaching out to other foreign markets would both mean logistical changes and the need to sell at a lower cost.
Portafolio reports that in 2013 Colombia’s income from exports to the US fell perhaps even more significantly than their drop in volume, as compared to the previous year, last November’s figures showed a 14% decrease to US$11,900 million.
This loss was compensated, however, by increased sales to Asia and Europe. Exports to China went up 74%, bringing in US$3,840 million, while sales to India doubled to 2.710 million and figures also rose for buyers Italy, Switzerland and the UK.
- Europa e India, nuevos destinos del petróleo colombiano (Portafolio)
- U.S. Imports from Colombia of Crude Oil and Petroleum Products (U.S. Energy Information Administration)
The post Colombia oil exports to US fall for 1st time in 6 years appeared first on Colombia News | Colombia Reports.
For website development, online marketing and promotion,
check out The Q Media
If you enjoyed this piece, please SHARE IT so other readers can find it and enjoy it.