Oil
Asian refiners increase African crude purchases as freight costs ease
Asian buyers have resumed purchases of Atlantic Basin crude grades following a significant decline in tanker freight rates from record highs.
Key points
- Tanker freight rates for African and Brazilian crude cargoes have dropped by about 50 percent from peaks reached last month.
- Major buyers such as Unipec and SK Energy have chartered vessels to load December cargoes from West Africa.
- Delivered costs for African and Brazilian crude in China have fallen between five and ten dollars a barrel.
What happened
According to CNBC Africa reporting citing traders, shipbrokers, and analysts, Asian refiners are increasing their purchases of Atlantic Basin crude. This shift follows a sharp correction in tanker freight rates, which have fallen by about 50 percent from record peaks recorded last month.
During October, shipping costs surged as Middle Eastern producers raised exports and increased vessel demand for ship-to-ship transfers. Furthermore, a blockade on Iranian exports and an approaching year-end deadline for Chinese import quotas intensified competition for available tankers.
However, a subsequent improvement in vessel availability, with laden mainstream vessels in East Asia increasing by roughly 15 percent since early September, has eased logistical pressures. Consequently, major Asian buyers have returned to the market. Unipec, the trading arm of Sinopec, and South Korea's SK Energy have recently chartered vessels to load West African grades for December delivery.
Prices for these grades have dropped correspondingly. Delivered costs for African and Brazilian crude to China have decreased by five to ten dollars a barrel compared to the previous month. Angolan Plutonio crude and Congolese Djeno grades are trading at lower premiums or deeper discounts relative to benchmark prices, attracting refiners seeking alternatives to elevated Russian ESPO crude costs.
Why it matters
For energy producers and investors across the African continent, fluctuations in maritime shipping costs play a crucial role in export economics. While benchmark crude prices—such as the US EIA Brent spot price of 107.03 US dollars per barrel recorded on November 3, 2026—determine baseline revenues, the net realization for African crude producers depends heavily on transport expenses. When tanker freight rates soar, the delivered cost of West African crude rises, potentially crimping demand from key Asian markets like China and South Korea. Conversely, the recent halving of freight rates restores the competitiveness of African grades against competing supplies. As global markets navigate complex geopolitical shifts and supply route adjustments, freight rate stability remains vital for maintaining steady export volumes from African crude producers to international buyers.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Crude benchmarks move budgets, currencies and inflation in producer and importer countries alike. For economies such as Nigeria, where fuels dominate exports, production and refining decisions move the whole economy.
9.5% of world merchandise exports were fuels in 2025Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
