Gasoline Traders Shift Exports To West Africa Amid Us Tariff Threats

in Freight News

17/04/2025

Threats of further tariffs from the US and an ongoing arbitrage to West Africa have led to an unseasonal shift in European gasoline export flows.

Typically the summer driving season sees increased flows from Europe to the US Atlantic Coast amid an uptick in summer driving demand. At the same time, specification differences between Europe and WAF which exist in the summer disappear in the winter, typically resulting in fewer volumes fixed to Nigeria.

The threat of tariffs and changes in Nigeria’s refining landscape have seen this trend flip in 2025. Large volumes are presently set to arrive in West Africa’s Offshore Lome hub, while the USAC has been demanding more limited flows amid demand-side fears and tariff threats.

According to ship-tracking data from S&P Global Commodities at Sea, 4 million mt of gasoline are projected to be delivered into West Africa from all locations over the 30-day period to April 27, a high not seen in over two years.

This compares with 1.6 million mt to the USAC over the same period, reaching an 11-month high but well within normal seasonal trends.

Tariff troubles

Significant uncertainty surrounding tariffs and associated recession risks has put a damper on what is typically a safe bet surrounding the summer gasoline arbitrage to the US.

Though flows to the US remain robust, fears surrounding tariffs and additional port fees have traders pointing to difficulties with the arbitrage. According to data from the Intercontinental Exchange, the spread between RBOB frontline gasoline and the Eurobob front-month swap was $16.351/mt April 14, not wide enough on paper for traders to put up with the uncertainty surrounding the US.

One inefficiency stems from the February proposal by the US to enact large port fees on Chinese-linked vessels. The proposal, which was updated April 9, suggests that the US Trade Representative may charge fees based on the number of Chinese vessels in a company’s fleet.

“It may tighten freight rates … and I think the US doesn’t understand that you can’t be confident having oil on the water with the threat of some random tariff,” said one gasoline trader.

Further dampening the US arbitrage is the threat of recession, which would disrupt the typical summer driving season. In its April 15 oil market report, the International Energy Agency pointed to the “possibility of recession and expectations of a period of heightened protectionism,” projecting world oil demand growing by just 730,000 b/d in 2025, around a third lower than its previous forecast.

“We expected NYMEX [RBOB] structure to strengthen a bit more decidedly now that the USAC transitioned to summer specs … [However] high uncertainty remains about demand growth in all areas due to the escalation of trade tensions — this is clearly a bearish driver we are following,” said Lenny Rodriguez, analyst at S&P Global Commodity Insights.

Pull from WAF

Material which otherwise would flow to the USAC has instead recently been exported to West Africa, amid a workable arbitrage and strong Nigerian imports.

“The freight to WAF is easier because there is no threat of the issue with Chinese ships,” said the first source.

Platts, part of Commodity Insights, assessed Long Range clean tanker rates along the UK Continent-WAF route at a $5.10/mt premium over Medium Range clean UKC-USAC rates as of April 14, reflecting stronger demand for West African voyages.

However, rates remain well below levels seen at the same time last year, which has helped open up the West African arbitrage. LR UKC-WAF voyages were assessed at $24.57/mt April 14, compared with $34.40/mt at the same time in 2024.

Incentives to ship product to West Africa have also come from the pricing at Nigeria’s Dangote refinery. While flat prices have been driven down massively amid falling crude prices, Dangote has not lowered gantry prices for truck volumes significantly.

Between April 1 and April 9, the Eurobob M1 swap fell from $734.25/mt to $603/mt, a 17.9% fall, before recovering somewhat. But over the same period, Dangote’s truck price at the gantry dropped just 1.7%, from Naira 880/liter to Naira 865/l, according to reporting from the MEMAN retail organization.

This has encouraged a flood of product to West Africa, where high domestic prices have led marketers to import from international traders in greater volumes.

Platts assessed Gasoline STS Lome at $656.75/mt April 14 — a 14 cents/mt premium to Platts 10 ppm barges, with this premium down $6.61/mt day over day.

Source: Platts