Friday, April 6, 2012

Part 5: Inter-Regional Trade Movements of Petroleum to and from Africa

In Part 1, I introduced my abbreviations, data bases and analysis methods, Part 2 presented the global trends, Part 3 presented the inter-regional trade movements to and from North America and Part 4 presented inter-regional trade movements to and from South America. 

Up to now in the series, part 2 revealed that 2007 was the peak in the total global pool of petroleum involved in inter-regional trade movements (i.e., imports and exports between any of nine regions: North America (NA); South America (SA); Europe (EU); former Soviet Union (FS); Middle East (ME); Africa (AF); China (CH); Japan (JP); Asia-Pacific remainder (APr)).  Now, as we proceed along to downside of a diminishing petroleum export pool, what are the trends suggesting how the remaining petroleum will get distributed between these nine regions?

In part 3, we saw a trend for diminishing imports to North America, especially from South America, and the Middle East, with Africa and the Former Soviet Union picking some but not all of the slack.  Exports, particularly petroleum products, from North America, especially to South America and Europe, is rising.  In part 4, we saw that those diminishing South American exports to North America were essentially being diverted to China, the other Asia Pacific countries (but not Japan) and to Europe. 

And now what are the trends for Africa?

Africa's Total Petroleum and Crude Oil Production and Consumption  Trends
Figure 1 presents AF’s total petroleum consumption rate (i.e., both domestic and imported petroleum) since 1980 as reported by the EIA or BP review (solid red circles and squares, respectively). 

Both the EIA and BP data set illustrate AF's growing consumption of petroleum from 0.5-0.55 bby in 1980 to 1.2-1.24 bby in 2010, with no plateau in sight. 

Figure 2 shows AF's total petroleum production rate (i.e. domestic production, solid blue circles and squares for EIA and BP data, respectively) and crude oil production (solid purple circles). 

Note the 3 times larger vertical scale in Figure 2 compared to Figure 1.  Since 1980 AF has been producing well over triple the petroleum that is consumes making it a relatively large petroleum exporter.  But there are clear signs that AF's rate increase in total petroleum production has slowed down since about 2005, which could be a sign of peaking production rates.  The close tracking between crude oil production (purple circles) and total petroleum production (blue circles and square) illustrates that since 1980, nearly all (over 90%) of AF's production has been crude oil production

Africa's Gross and Inter-regional Export and Import Trends
Figure 1 also shows AF's gross and inter-regional imports of total petroleum, crude oil and petroleum products.  The EIA import data (open circles) only runs from 1986 to 2008 while the BP review import data (open squares) only run from 2000 to 2010.  AF shows signs of a peak in inter-regional petroleum imports around 2007-2009.

From 1986 to 1997 AF's gross total petroleum imports (open red circles) were fairly flat at 0.3-0.4 bby, after which imports rose to 0.7 bby by 2005.  The total inter-regional imports (open squares) also shows increasing import rates for 2000 to 2007, but then a plateau for a few year and then a strong down turn in 2010.  In is apparent that that 2010 down turn in inter-regional total petroleum is reflecting a down turn in inter-regional crude imports (open brown squares).  The gross crude oil imports (open brow circles) are only slightly higher than inter-regional crude oil imports, implying that intra-regional imports (i.e., imports from one country within AF to another country within AF) are small.  The increase in total petroleum imports after 1997 is mainly explained by petroleum product imports (open green circle) which started to rise in 1997.  Inter-regional imports (open green circles) increased from 2000 to 2008 and has slight gone down since then.

Figure 2 also shows AF's gross and inter-regional total petroleum, crude and petroleum products exports.  Once again, The EIA import data (open circles) only runs from 1986 to 2008 and the BP review import data (open squares) only run from 2000 to 2010.

Gross total petroleum and crude oil exports increased fairly steadily since 1986 until 2004 when a plateau was reached.  Inter-regional exports of total petroleum and crude oil peaked in 2007 at 3.2 and 2.9 bby, and have declined to 2.9 and 2.6 bby, respectively, by 2010. 

Gross and inter-regional petroleum product exports are comparatively much smaller at 0.4 to 0.3 bby and the close similarly of gross and inter-regional numbers implies that there has very little intra-regional exports of the petroleum products within AF.

Figure 3 shows AF's total petroleum, crude oil and petroleum product imports relative to the respective gross and inter-regional global petroleum import pools.  AF’s signs of a peak in inter-regional petroleum imports around 2007-2009 is even more clear than in Figure 1.

After hitting a minimum of about 2 percent of the gross total petroleum import pool (red circles) in 1996, AF gross total petroleum imports has risen steadily to 3 percent by the last EIA reporting year 2008. Gross crude oil imports (brown circles) during this period are flat to declining at about 1.7 to 1.5 percent.  In contrast the gross product imports (green circles) increased from 0.7 percent to 1.7 percent and pointed out in the context of Figure 1, it is this which explains the increase in total petroleum imports since in1996.

AF’s inter-regional total petroleum imports (red square) corresponded about 2.5 percent of the total inter-regional import pool until 2007 when it vaulted up to 3 percent and then in 2010 fell off a cliff to below 2 percent.  Inter-regional crude oil imports (brown squares) were fairly stable at 1.5 to 1.7 percent of the total inter-regional import pool until 2010, when it dropped precipitously to 0.7 percent in 2010.  AF’s share of the inter-regional petroleum product imports pool (greensquare) increased from a steady 0.9 to 1.3 percent in 2007, but has steadily declined since then.

The trends shown here and in Figure 1 are similar to South America’s, discussed in part 4:  AF’s crude imports are flat to declining while petroleum product imports are increasing.  AF’s draw on the inter-regional import pool of petroleum at 2-3 percent is even smaller than SA’s. 

Figure 4 shows AF's exports relative to the respective total gross and inter-regional global petroleum export pools, which, of course, is about the same as the global import pool.   Analogous to the imports trends shown in Figure 3, these relative export amounts are expressed as a percentage of the total gross export pool and the total inter-regional export pool, and, these total pool sizes are different: e.g., 23 bby of gross exports in 2008 versus 17.1 bby inter-regional exports in 2008. 

Figure 4 has a much larger vertical scale than Figure 3 because AF’s contributes much more into the global export pool than it imports from—AF is a very strong relative net exporter; much stronger than SA, for example.

Except for a slight up tick in the early 90’s AF’s gross total petroleum exports (blue circles) has been quite steady at about 13 of the gross export pool.  By far it is crude oil (brown circles) that makes up the bulk of AF’s exports.  AF’s gross crude oil exports supported 11 percent of the global export pool from 1986 to 2008, with petroleum products exports (green circles) providing another 2 percent. 

AF’s total inter-regional petroleum exports (blue square) makes up an even larger portion of the inter-regional export pool, peaking at 18.5 percent in 2007 and down to 17.2 percent in 2010.  Again most of the inter-regional exports are from crude oil exports (brown square) with petroleum product imports (green squares) providing a very steady 2 percent of the total global inter-regional export pool.

African Intra-regional Export and Import Trends
The difference between the gross and inter-regional imports or exports, shown in Figures 1 and 2, respectively, should correspond to intra-regional trade movements of petroleum.   For the reasons presented in Part 3, I think that these differences are only rough estimates of intra-regional imports and exports.  But still, I will show the differences, with some brief commentary.

Figure 5 shows the differences between the gross and inter-regional total, crude oils and petroleum product imports, which should equal the intra-regional values for these quantities. 

As you can see the difference gross and inter-regional total petroleum imports (red triangles) is quite small, about 0.2 bby.  In comparison North American and South American intra-regional imports were 1.5 bby and 0.8 bby, respectively (see parallel figure 5 in parts 4 and 5, respectively).

Crude oil intra-regional imports (brown triangles) have increased, while product imports (green triangles) have declined, resulting in a pretty flat trend in total intra-regional petroleum exports (red triangles) at about 0.8 bby.  There is a trend for petroleum product intra-regional imports (green triangles) to be increasing and crude oil imports (brown triangles) to be decreasing.

Figure 6 shows the differences between the gross and inter-regional total, crude oil and petroleum product exports, which should equal the intra-regional export values for these quantities. 

Total petroleum intra-regional exports (blue triangle) are similarly very small, about 0.3 to 0.4 bby from 2000 to 2005 and then essentially zero since then.  Both crude oil and product intra-regional exports (brown and green triangles, respectively) are trending towards zero.
So where does AF’s petroleum exports go, and, what source was the cause of that dramatic loss in crude oil imports in 2010?  Let’s see if the BP review’s trade movement data can provide some insights.

Trade movements of total petroleum between Africa and other regions
Figure 7 show the specific quantities of petroleum, in units of bby, imported by AF FROM each of the eight other regions.  For reference, Figure 7 also shows the sum of AF's total inter-regional petroleum imports from all eight of the other regions (black "Xs"), which is the same as presented in Figure 1 (red open squares).

As you can see AF's inter-regional total petroleum imports (black X’s) steadily rose to 0.5 bby in 2007 and then dropped back down to 0.3 bby by 2010—that’s even lower than AF’s imports in 2000.  The drop in imports was due to a more than 50 percent decrease in imports from the Middle East (ME) from 0.33 bby in 2007 to 0.11 bby in 2010.  The overall decline in AF’s imports would have been even greater but for a slight increase in imports from Europe (EU) in 2009, and more minor increases in imports from North American (NA) and remaining Asia Pacific regions (rAP). 

The decline in petroleum imports from the ME is so dramatic that if the trend continues then EU would be AF’s number one import source. 

The BP review data doesn’t break this out, but my hunch is that the dramatic drop in crude oil imports and the increases in petroleum product imports shown in Figures 1 and 3, are likely due to a strong decline in crude oil coming from ME, and, increases in petroleum products from EU, NA and rAP. 

Figure 8 shows petroleum export from AF TO each of the eight other regions and again for reference, I show AF’s total exports (black “Xs” corresponding to the blue squares in Figure 2).  Note the much larger vertical scale compared to Figure 7, illustrating AF’s role as a relatively large net exporter of petroleum.

Figure 8 illustrates the general upward trend in AF’s total petroleum exports, and shows that EU and NA are about presently about equal major export destination for AF’s petroleum both at about 1 bby in 2010.  The trend is for increasing exports to NA with exports to EU remaining flat to decling. 

Despite the slight increases in imports from EU and NA, AF exports far more petroleum to either region: 0.11 bby from EU to AF, versus 0.95 bby from AF to EU in 2010; 0.03 bby from NA to AF versus 0.92 bby from AF to NA in 2010.

However, after peaking at 1.1 bby to NA in 2005, exports to NA have since declined to 0.85 bby.   This quantity is still about 3 times more than the 0.29 bby of petroleum that NA sends to SA (Figure 7), so SA is still a net petroleum exporter with respect to NA. 

While AF’s exports to rAP is flat at about 0.3 bby, there has been a large increase in export from AF to China (CH) and a lesser expect SA.  Over the last decade exports to CH increased from 0.12 to 0.49 bby; exports to SA increased from 0.06 to 0.13 bby—those are over 400 and 200 percent increases, respectively. 

Figures 9 and 10 present the same data as shown in Figures 7 and 8, respectively, but expressing AF's petroleum imports or exports, to or from each of the eight regions, as percentages of the total global inter-regional petroleum import/export pool ( global inter-regional imports and exports are the same) .  For reference, I also show AF petroleum imports and exports as percentages of the global petroleum import/export pool (“Xs” right vertical axis; note the different scale). 

Additionally, I have taken all of these data and made linear extrapolations of the 2000 to 2010 data (via linear regression analysis) out to 2021. 

Figure 9 shows the import trends discussed in the context of Figure 7: increasing amounts of petroleum imports from EU rAP and NA and strongly decreasing imports from ME.

Figure 10 shows the export trends discussed in the context of Figure 8:  declining exports from AF to EU and rAP, and, increasing exports from AF to NA, and SA.

The linear regression trends suggest that in about 2006 CH over took rAP as the number three export destination for AF’s petroleum exports, and, CH could eventual overtake EU as the number two export destination in about 2018.  It would take much longer for CH to overtake NA as the number destination because the trend is also from increasing exports to NA albeit at a slower rate of increase that the rate of CH’s increase.

Finally, Figures 11 and 12 show the relative changes in AF's import sources and export destinations, respectively, as a percentage of AF's total exports or imports in the years 2000 and 2010, and, as predicted in 2021, from the linear regression trend lines shown in Figures 9 and 10.

Figure 11 illustrates the trends for increased imports from EU, rAP and NA and steeply declining imports from the ME. 
In 2000 the ME was providing 77 percent of AF’s imports, and by 2010 that number was down to 37 percent.  A continuation of that trend will make ME a still important source at 16 percent in 2021, but in second place behind EU.  EU provided 19 percent of AF’s imports in 2000 but 36 percent in 2010, with an extrapolation to 47 percent in 2021.  NA and rAP were negligibly small import sources in 2000, but that was up to 8.4 and 12 in 2010, and the trend is for further increases to 11 and 15 percent in 2021—not too far behind ME.

Figure 12 illustrates how AF’s petroleum export destinations away from EU and rAP and towards NA and CH, and to a lesser extent, SA.

In 2000, overwhelmingly, AF’s exports went to EU (44%), NA (30% ) and rAP (16%), with CH a distant fourth (5.6%).  By 2010, CH (17%) had surpassed rAP (11%) and NA (33%) was receiving nearly the same proportion of AF’s exports as EU (33%).  By 2021, the trend is for both NA (39%) and CH (28%) to have surpassed EU (23%), and, SA (6%) is predicted to be receiving more of AF’s petroleum than rAP (3%).

Summary and Conclusions
AF’s petroleum exports of 2 to 3 bby over the last decade (Figure 2) has accounted for about 16-18 percent of the inter-regional global petroleum export pool (Figure 4).  Over this period Africa’s petroleum inter-regional imports reached a peak of about 0.5 bby or 3 percent of the global import/export pool in 2007, and then dropped precipitously to 0.3 bby 1.8 percent of the global ppol in 2010.  The drop appears to be due a large decrease in crude oil going from the Middle East to Africa.  Increasing petroleum product imports, mainly from Europe, have partially offset the declining imports. 

In the past decade, Africa's inter-regional exports of petroleum have shifted away from Europe and the remaining Asia Pacific region (which excludes China and Japan), towards North America, China and to a much lesser extent, South America (Figure 12).  If these trends continue, by 2021, Africa’s number one and two export destinations would become North America and China, respectively, with Europe in third place.  
Next time, I head north to examine Europe’s petroleum Export and Import Trends. 

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