Critical Overview of Seaborne Trade Dynamics and Crude Oil Transportation Trends in the UK
Seaborne trade implies the exchange of goods and services through maritime routes or the transportation of cargo via seas and oceans. This trading system supports sustainability due to a relatively lower carbon footprint and reduced fuel requirements. Shipping is the most preferred transportation mode in the UK, as around 95% of total international trade in food, raw materials, and oil is conducted through this channel. It has been identified that the shipping industry contributed over £6 billion to the UK economy by the end of 2023 and accounted for nearly 19% of the transport industry. Derived demand refers to changes in demand for specific goods and services that occur due to fluctuations in demand for related products, while average haul represents the total distance travelled by cargo, significantly influencing shipping demand. This report will present a critical analysis of crude oil seaborne trade over the last five years by examining the roles of derived demand and average haul, with contextual academic support drawn from Online Assignment Help UK.
Findings
In the current times gas and oil industry plays a crucial role in enhancing overall economic status of UK as it is contributing over £6.1 billion in year 2024 which is 9% of overall country’s GDP (Contribution of Gas and oil industry in UK’s economy, 2025). Presently, more than 90% of oil transportation is initiated through oil tankers due to which demand for maritime trade get increased significantly. The demand of mineral oil has risen due to the strengthening of economic growth. Further, there is an inequitable distribution of crude oil throughout the globe and it is primary concentrated in the area of Asia- pacific, Europe and North America (Ahmed et al, 2023). Therefore, imbalance in the oil resource distribution and its uneven supply and demand has led to continuous development of crude oil’s seaborne trade.
7 Years | MA
From the above graphs, it has identified that there is continuous change in the seaborne crude oil trend in last five years due to change in demand, geopolitical tension, economic slowdown and fleet capacity. It has identified that there is decrease in ton mile demand in year 2021 and 2020 due to Ukraine war and Corona which again increases in year 2022.
UK’s crude oil seaborne trend:
Following image denotes the export of UK’s crude oil through seaborne trade:
From the above graph, it has been identified that in year 2020 UK is exporting over 1.7K GBP million which was reduced to 878 million pound in year 2021. The export was increased to 1.19K in the year of 2022 which was further increased to 2.37 K in the year of 2023 (Export of UK’s crude oil, 2025). In the last year, UK has exported 1.18K million pound of crude oil which was 11% less as compared to the previous years.
The above graph define overall import of crude oil which amount to 60.4K million pound in year 2020 that was further increased by 5K million pound in the year of 2021. There is an increasing trend of importing crude oil as it amounted to 78.98K million pound in the year of 2022 (Import of Crude Oil, 2025). However, this was reduced to 69.3K pound in 2023 and further increased to 73K pound in year 2024. From the above two graph, it has been identified that there is a higher amount of import that export of crude oil which indicates negative balance of trade and trade deficit within the country (Alaali, 2020).
All the import and export of crude oil within UK is initiated through sea routes which eventually influences by shift in demand of the same. The shipping demand is hugely impacted by the shipping theory of demand and supply (Zhang et al, 2020). It has been identified that when the demand of the goods and services increases then it will eventually result into rising shipping demand and vice versa. Following are various factors that may cause changes in the demand of crude oil and thereby impacted overall seaborne trade in the last five years:
Over dependence over Oil: It has been identified that 97% of total fuel is used for transportation and the gas is utilized for generating energy and heating (Usage of Crude Oil in UK, 2025). Moreover, UK fulfil its needs through seaborne trade as it is cost conscious method that aids in reducing the overall price of crude oil. Marine Barger and vessel are used to transport crude oil as they carry huge amount of oil in one go that leads reducing transportation cost (Cherukupally et al, 2020). Till the year 2023, there was increase in ton mile due to excessive use of fuel for transportation, however shift towards EV vehicles has ultimately reduce its demand. It has been identified that EV has reduced demand of crude oil by four times that ultimately impact on seaborne trade. On the other hand, EV is not able to significantly reduce need of crude oil as 75% of world’s electricity is generated through fossil fuels.
Get assistance from our PROFESSIONAL ASSIGNMENT WRITERS to receive 100% assured AI-free and high-quality documents on time, ensuring an A+ grade in all subjects.
Impact of geopolitical factors: In the year of 2022, there was significant decrease in the import and export of UK’s crude oil due to Russia and Ukraine war. This situation has occurred as Russia is the second largest supplier of natural gas and crude oil within world and the war with Ukraine has resulted in creating huge amount of supply chain disruption (Adekoya et al, 2023). This war has also contributed towards increasing crude oil prices by 11% that ultimately leads to reducing overall demand and thereby impacting seaborne trade (Impact of Ukraine and Russia war on crude Oil, 2025). Organization of Petroleum Exporting countries (OPEC) has defined that war has created huge impact on speculative activities, supply demand imbalance and inventories issue which has ultimately resulted in increasing oil prices and thereby reducing demand.
Weakened US dollar: In the year of 2023, US dollar was weakened as compare to UK pound that has resulted in excessive increase in import of the country (Mostafa et al, 2024). Crude oil is usually traded in US dollar and exchange rate has created significant impact on overall oil prices. Due to weakening of US dollar there is reduction in oil prices in other country that result in increasing tone mile demand of crude oil and leads to higher import.
Introduction of international policy: It has been identified that Brexit was introduced in year 2020 that has resulted in reducing overall import and export of crude oil within UK. It has identified that import through shipping with EU has reduced by 17% and export by 20% (Brexit impact of Seaborne trade, 2024). Further, Brexit also leads to establishment of large number of restriction in dealing which ultimately result in reducing overall exports and imports.
Economic condition and Corona pandemic: The demand of seaborne trade of crude oil also reduces due to Corona pandemic that has resulted in decreasing overall import and exports in year 2020 (Song et al, 2020). Demand for crude oil reduces as individual were forced to stay home which decreases overall transportation and ultimately result in lower seaborne trade. Moreover, the recession has also resulted in diminishing overall purchasing power and thereby dropping demand of crude oil.
Technology innovation: Due to technology advancement digitalisation has been introduced in shipping and efficient fuels have also introduced which has resulted in increasing demand for seaborne trade.
Average Haul is another crucial factor that is impacting on overall crude oil seaborne trade within UK. Average haul and shipping demand is positively related as increase in shipping average Haul leads to increasing shipping demand and vice-a- versa (Ekperusi, Nwachukwu and Sikoki, 2020). There is constant change in export and import of UK’s seaborne crude oil trade which is highly impacted by Average haul. It has identified that cist of tone mile increases due to change in the route of transportation that ultimately impact on overall shipping demand. It has been determined that Russia-Ukraine war has resulted in blocking various sea routes that leads to increasing haul time by 30 days (Sun, Hao and Li, 2022). Earlier, Russia was major exporter of crude oil but after the war Europe decided to break the contract due to which there was change in trade pattern. Earlier, UK was able to source crude oil in 5-6 days and now the country needs to wait for 30 days for receiving the same that eventually boost demand and thereby higher imports (Crude Oil route change in UK, 2025). UK has opted to Latin America, US and West Africa that has extended freight routes which eventually result in higher shipping demand.
UK is highly relying on import of crude oil, fuel and diesel as country is not able to fulfilling its needs from internal production. It has identified that 80% of UK;’s crude oil is exported top international Market even after huge need within the country (Reason for huge crude oil import in UK, 2023). This has been done as UK’s refineries are not developed to process crude oil from North Sea as refineries were created before the discovery of North Sea oil. UK’s refineries are only capable in processing Libyan oil that consists of lower sulphur where as north sea oil are sour which could not be processed. Due to this reason, country has focused on importing huge amount of crude oil from an international market that could be easily processed (Bagchi and Paul, 2023). UK is importing crude oil from Norway (£18.3B), Nigeria (£1.33 B), Libya (£1.39B), United States (£11.4B) and Algeria (£1.15B). However, crude oil is further exported to Netherlands (1.52B), Poland (1.41 B) and to Germany (1.51B) (Countries from which UK’s export crude oil, 2024). Following are various shipping strategies that followed by UK while initiating trade which as follows:
Voyage charter: In the seaborne trade, an organization and country usually faces huge cost as cargo return empty after the delivery of goods. Due to this, country needs to pay two- way freight charges that eventually reduces overall benefits that are derived from trading (UK’s shipping strategies, 2024). To overcome the issue, UK has used Voyage charter strategy in which a ship is usually charter for one way that helps in reducing the overall cost. This is an effective policy as country was able to manage its overall cost which aids in boosting profitability. However, during peak time there is high market fluctuation which results in impacting on overall financial position.
Optimized shipping: Country is always emphasising on balancing time and date of exports and imports which helps in managing the overall cost of transportation. Country aims at managing time duration so that ships could load imported goods which will resist cargo to come vacant and there by contributing towards reducing cost (Maraqa and Bein, 2020). Moreover, Transportation is initiated with large amount of goods which help in reducing per unit cost of transferring and aids in effective international trade. This is not an adequate strategy as it is not possible to easily optimizing shipping time which creates issue in timely delivery of goods.
Align with reliable organization: UK’s shipping procedure is undertaken through reliable authorities and organization such as Maritime and coastguard Agency (MCA), Dalsey, Hillblom and Lynn (DHL) which help in successfully carrying out shipping process (Jing et al, 2020). These organizations are effectively aligning with the sustainability policies and regulation of Marine conservation society which aids in successfully carrying out seaborne trade. Further, organization is effectively aligning with IMO regulation that aids in managing seaborne trading in effective manner.
Conclusion
By summing up the report, it has been identified that there is constant change in the seaborne crude oil trade in UK. UK’s shipping strategy includes Voyage charter, optimizing shipping and aligning with reliable organization which aids in successfully undertaking international trade. It has been identified that UK’s refineries are not designed and developed to process North Sea oil due to which country is heavily relying on import of oil. Over dependence over oil, geopolitical factors, wars, weakening of US dollar, introduction of Brexit, Corona pandemic and Economic condition are major factor causing change in shipping demand in last five years. Moreover, Change in trading routes is another crucial factor due to which average haul increases that result in higher shipping demand.
References
Books and Journals
Online
Chapter 1: Best Practices for Delivering Safe Care to Autistic Adults with Complex Needs Get expert assistance from...View and Download
Introduction Health and social care is one of most responsible field and it highly contributes to the welfare of society. A...View and Download
Digital Learning Platform Influence on Student Engagement and Performance in Secondary Schools The pilot study will emphasise on...View and Download
Introduction Get free samples written by our Top-Notch subject experts for taking assignment help uk services...View and Download
Introduction: Human Engineering...View and Download
Introduction: Financial Report On Personal Development This Financial Report On Personal Development includes a report on...View and Download
Copyright 2025 @ Rapid Assignment Help Services
