Sixty percent of the crude oil produced in the US is exported, either as crude or in the form of gasoline, diesel, jet fuel, or other petroleum products. Sure, a lot of crude and products are still imported, but the net import figure is shrinking to zero, and if you include NGLs in the liquid fuels balance, the US is a net exporter as of 2020. Yes , exports are now said to be drawn on US liquid fuel flow patterns, price differentials, infrastructure utilization and, to a large extent, the winners and losers in the commodity and crude oil markets. It will become much more intense as the export economy increasingly dominates which pipelines, refineries and port facilities capture production growth from the Permian and other basins. On today’s RBN blog, we begin a series to explore this revolutionary change in fortunes, why barrels move where they do, and what it all means for US producers, midstreamers, refiners, marketers and exporters. And a warning! This is a subliminal ad for our upcoming xPortCon-Oil conference.
This is how we calculate our export numbers. In 2022, the US produced 11.8 Mb/d of crude oil and exported 3.5 Mb/d of crude oil and 3.6 Mb/d of petroleum products: 7.1 Mb/d of crude oil exports and products in total, or 60% of crude oil production. Of course, some of these petroleum products are produced from the 6.3 Mb/d of crude oil that the US imports or are available for export due to 1.9 Mb/d of imports of products But even adding these volumes to the balance sheet, the US was a net importer of just 1.1 Mb/d of crude oil and petroleum products last year. As U.S. crude oil production continues to grow, that number falls inexorably toward zero and beyond, toward a world where the U.S. is a net exporter of crude oil and products, no matter how the numbers look.
Large exports of crude oil and products are not just about “energy independence” bragging rights. Export markets now determine where crude oil flows, which pipelines get throughput, and the price that different crudes can command on the market. Since the early days of US oil and gas, it has been domestic refineries and downstream demand that have been the dominant market forces in liquid fuel markets. But not anymore. Now, with a large portion of marginal barrels moving overseas, exports have taken on a much more dominant market role.
