Oil trade in Singapore is up 47.5% year-on-year

According to government agency Enterprise Singapore, the value of Singapore’s oil trade increased by 47.5% from a year earlier in 2022, continuing a 43.6% gain in 2021. Expanding domestic exports and re-exports of refined products mostly caused this increase.

The increase in oil trade value occurred during a year in which oil majors made huge profits as oil prices rose globally as a result of Russia’s invasion of Ukraine, which changed the dynamics of the energy markets.

According to figures from Enterprise Singapore, the country’s domestic oil exports increased by 52.4% in nominal terms last year, building on a 38% surge in 2021. The increase in oil exports from the domestic market was due to an increase in the value of shipments to Malaysia, a well-known hub for blending, which increased by 66.1% year-over-year.

Singapore’s export destinations

According to the report, Indonesia and Australia were Singapore’s other two biggest export destinations, with shipments to each country increasing in value by 66.5% and 53%, respectively. Exports increased in volume by 1.7% over the previous year compared to 2021, when volumes decreased by 10.1%. Oil re-exports from Singapore increased nominally from the year before as well, increasing by 28.1% in 2022 and building on 2021’s 19.1% gain.

Gains in re-exports to Asian nations, especially Bangladesh (358.8%), Myanmar (184.4%), and Taiwan (252.9%), were the main contributors to the increase. Oil re-exports, however, decreased by 5.4% in volume from 2021, when they decreased by 26.2% from the year before.

Lower anticipated oil prices could weigh on oil trade in 2023 and, in turn, weigh on total merchandise trade this year. However, Enterprise Singapore claimed that Singapore’s 2022 total merchandise trade was underpinned by growth in oil trade. As recessionary uncertainties and a choppy demand rebound weighed on mood in 2023, the price of oil has declined from multi-year highs recorded in 2022.

Oil prices fall amid rate increase fears

WTI crude futures fell on Monday, dropping to near $79. This drop came as economists said the US Fed could tighten monetary policy more to control inflation. But Russia’s response to western sanctions made things worse.

The US labor market is strong and the Fed is still committed to lowering inflation through additional rate hikes. This tightening cycle is not over yet. Now that investors know the Fed’s policy intentions, they’re expecting Tuesday’s inflation report to provide new information.

Because of Russia’s announcement that it will reduce output by 500,000 barrels per day, or roughly 5% of total production, in March, the US oil benchmark increased by more than 2% on Friday, extending the week’s gains to about 9%. On the strength of a strong demand prognosis, Saudi Arabia also increased prices for Asian consumers.

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