Market analysts expect VLCCs to soon enter the Argentine oil market, which is dominated by smaller tankers. Shipbroker Gibson said in its latest weekly report that Argentina's new president is seeking to revitalise the economy and that the country's oil and gas sector has made progress in boosting production and exports.
Vaca Muerta is home to the largest shale formation on the American continent, with the world's second-largest shale gas and fourth-largest shale oil reserves, and its recent crude oil production reached around 300,000 barrels per day. The authorities now plan to increase this to 1 million b/d by 2030 and provide tax breaks for investments of more than $1bn, as well as implementing tariff exemptions for imports of equipment designed to support exploration and production. According to Gibson, Argentina's national oil company, YPF, has begun construction of a $2.5bn crude oil pipeline to connect the Vaca Muerta shale field to the port of Punta Colorada, located on the Atlantic coast. Construction has begun on the first 130 kilometres of the planned 600-kilometre pipeline, according to Oil & Gas Journal. The project is expected to produce 180,000 barrels per day by 2026 and 400,000 barrels per day by 2030. The port will be fitted with two berths that can receive VLCCs.
The International Energy Agency (lEA) estimates that Argentina's light tight oil supply will increase to 830,000 bpd by 2030, up from 520,000 bpd in 2023, raising total production to 1.2 million bpd. And while Argentina's crude imports are negligible, the increase in its domestic production will be used mainly for exports.
Data show that Argentina's seaborne crude exports have been stable at over 100,000 b/d for the past two and a half years, mainly to the US and Brazil via Aframax, Panamax and Suezmax vessels. Loadings by Aframax-type tankers have surged in the past six months, increasing their market share from 4 per cent last year to nearly 30 per cent this year, mainly to US refineries. Once the oil pipeline project in the Cape Colorado Harbour comes into operation, the market share of mega tankers will increase, and the market landscape will change.
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