Crude oil trade off Yemen’s coast reached 4.7mn barrels per day in 2014, a 20% year-on increase, the US Energy Information Administration has said.
Trade in crude oil and petroleum products transiting the Bab el-Mandeb, a strait located between Yemen on the Arabian Peninsula, showed a steady increase in recent years rising from 2.7mn bpd in 2010 to almost 4.7mn bpd in 2014, accoridng to the EIA.
From 2013 to 2014, trade grew by more than 20%, with an increase of more than 200,000 bbl/d in crude oil exports from Iraq to Europe contributing to higher northbound traffic, the agency added.
Although Yemen is not a major producer of oil, it plays an important role of the region’s petroleum industry mainly due to its strategic location near the Bab el-Mandeb strait, which is a crucial route for Persian Gulf oil, natural gas, and petroleum product shipments to Europe and North America, as well as European and North African oil exports to Asia.
Record-level exports of crude oil and petroleum products (particularly distillate fuel oil) from Russia to Asia contributed the most to higher southbound traffic through the strait, somewhat offset by declines in exports of petroleum products from Europe and exports of crude oil from Libya, the EIA added.
While oil trade volume has increased over the past five years through the Bab el-Mandeb, liquefied natural gas (LNG) shipments through the strait have declined, the agency has found.
“Middle East LNG exporters, especially Qatar, have been steadily exporting more LNG to Asia, while European imports of LNG have declined. More than 2 trillion cubic feet (Tcf) of LNG passed through the strait in 2011, roughly 18% of world LNG trade. By 2014 EIA estimates the volume fell to about 1.2 Tcf, or only 10% of world LNG trade.”
Deteriorating security conditions in Yemen could take a toll on crude oil exports and jeaopardise trade in the Gulf.
“Increased instability around the Bab el-Mandeb could keep tankers in the Persian Gulf from reaching the Suez Canal or the Sumed Pipeline, diverting them around the southern tip of Africa, adding to transit time and cost,” the EIA said.
“In addition, European and North African southbound oil flows could no longer take the most direct route to Asian markets through the Suez Canal and then on to the Bab el-Mandeb,” it added.
