Where Did All This European Crude Go?

I'm always interested when I see big changes happening in key statistics.

Often the implications aren't immediately apparent when an indicator starts wildly rising or falling. But the control panel is blinking a message that a shift is in motion. And major shifts always have consequences.

I'm getting that feeling looking at the oil market in the Ukraine.

The country's Energy and Coal Industry Ministry reported last week that national oil imports fell by a staggering 80% year-on-year during the eight months ended in August.

All told, Ukraine imported just over 1.7 million barrels of crude during this period. Down from 8.6 million barrels during the same period in 2012.

That puts Ukrainian oil imports at just over 200,000 barrels per month. A particularly striking number, when you consider that the country's oil imports were running about 3.7 million barrel per month as recently as 2011.

What gives? The Ukrainian Ministry gave no explanation for the cliff-like decline. But it doesn't appear that oil-based demand in the country is falling. Consumption of crude oil products nationally was down only 5.7% from 2012.

If Ukraine is still using oil products but not oil, it implies that they must be buying significant amounts of product from refiners in other countries. That means refinery sales should be exploding somewhere, as sellers tap the significant Ukrainian market like never before.

It also begs the question: if Ukraine is suddenly taking a lot more product, who is losing supply? Given the conceivable amounts involved, the shift in product flows should be causing shortages (and likely price increases) somewhere.

Keep an eye out to see where such consequences pop up. This could be a profitable opportunity for someone.

Here's to changes in motion,

By. Dave Forest