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Blog : 1 December 2016 (Crude Oil Imports into SA from January 2010)
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We take a look at South Africa's crude oil imports from January 2010 to October 2016. South Africa has imported 131billion kilograms of crude since January 2010. And the value of the crude imported amounted to R800.6billion at an average price of R6.10 per kilogram of crude oil imported.
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Value of Crude Oil Imports since 2010
The graphic below takes a look at the total value of crude oil imports per year into South Africa. We will then take a look at where the crude oil is coming from and what the average price per country was where the crude was imported from. To give readers an idea of the scope of crude oil imports into South Africa, crude oil imports makes up roughly 18% of total imports into South Africa each month. Low crude oil prices in recent years has provided some much needed relief to South Africa's trade balances. As we argued in the past since crude is such a big import into SA, a strong Rand helps reduce our import costs and may infact lead to better trade balances, which is contrary to basic economic theory that suggest a weaker exchange rate leads to better trade balances (as weak exchange rates makes exported goods more attractive and imported goods more expensive).
Note 2016 data has been extrapolated using all available 2016 data to estimate up to end 2016.
As can be seen from the bar chart above, the quantity of crude oil imports have dropped off since the peak reached in 2014. In addition to this the average price per kilogram of crude oil dropped from around R8 per kilo in 2014 to roughly R4.50 per kilo paid in 2016. The sluggish economy showing it's face with the decline in the demand for crude oil the last two years.
As can be seen from the bar chart above, the quantity of crude oil imports have dropped off since the peak reached in 2014. In addition to this the average price per kilogram of crude oil dropped from around R8 per kilo in 2014 to roughly R4.50 per kilo paid in 2016. The sluggish economy showing it's face with the decline in the demand for crude oil the last two years.
Crude Oil per country
The pie chart above shows the biggest contributors to South Africa's crude oil imports. These 10 countries are responsible for 95% of South Africa's crude oil imports since January 2010. It's clear that the majority of South Africa's crude oil comes from Saudi Arabia with almost 38% of crude coming from Saudi Arabia. In second place it's Nigeria with 28.7% of South Africa's crude oil imports and Angola in third place with15.7% of South Africa's crude oil imports.
The bar chart below shows the average price paid by South Africa per kilogram of crude oil imported from various countries since January 2010. Based on this bar chart South Africa should try and import more crude oil from Iran (if and when sanctions allow), as the price paid to Iran is less than half the price paid to their African cousins, Ghana and Equatorial Guinea. Even Nigeria charges South Africa more for crude oil than the arabian countries such as Saudi Arabia, Qatar, United Arab Emirates etc.
Readers should note the price of crude is often dependent on the quality of the crude. Perhaps better quality crude oil is imported from Nigeria,Guinea and Ghana and therefore we pay more for it. We are not experts in this field and cannot say this is the case, but it might be a possible reason.
Readers should note the price of crude is often dependent on the quality of the crude. Perhaps better quality crude oil is imported from Nigeria,Guinea and Ghana and therefore we pay more for it. We are not experts in this field and cannot say this is the case, but it might be a possible reason.
With OPEC agreeing to cut production (and sending the price shooting sky high overnight) South Africa should look to shop around to get the cheapest supplier of crude oil. And this bar chart above shows exactly where South Africa should be looking to get their crude oil from.