Crude oil exports are reaching record volumes. Geopolitical dislocations, regional capacity constraints, and transportation cost aberrations are disrupting global trade flows. These developments have a direct impact on US export qualities, prices and utilization of pipelines and terminals. Petroleum product exports have an equally formidable set of challenges. US refined product surpluses are growing as domestic demand declines and biofuel penetration increases. The impact will translate directly into changes in flows between PADDs, infrastructure reuse and more exports from the Gulf Coast. We will explore these and many more developments in our next conference, xPortCon-Oil 2023which will be held in Houston on June 8, 2023. In this shamelessly hyped blog, we’ll present the main topics that will be covered at the conference, who will be attending and why we believe this will be the most important meeting of the crude oil industry and markets of products this year.
As we have discussed in several recent blogs, exports are now Calling the shots in US liquid fuel flow patterns, price differentials, infrastructure utilization and, to a large extent, winners and losers in crude oil and commodity markets. We documented how 60% 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. Of course, this figure must be taken in the context of the significant volumes of crude oil and products still being imported. But the reality is that US net imports are declining to zero, and if you include NGLs in the liquid fuels balance, the US has been a net exporter of liquid fuels since 2020. We’ve addressed Permian crude flows a Body of Christ i Houstonhow the US will become a leading exporter of renewable diesel and sustainable aviation fuelthe impact of crude oil flows on infrastructure requirements (driving plans of Enbridge i company), and what all this has meant for crude oil price mechanisms (Trade in the USA).
Figure 1 puts the problem of crude oil export growth into perspective. After the lifting of the ban on crude exports to countries other than Canada in late 2015, export growth started slowly in 2016 and 2017, averaging 230 Mb/d and 800 Mb/d, respectively. But then exports abroad (blue layer) soared, rising to an average of 2,650 Mb/d between 2019 and 2021. Then, as shown in the inset on the right, total exports increase to 3,600 Mb/d on average by 2022 (horizontal dotted grey). line) and exceeded 5,000 Mb/d so far this year in weekly EIA figures (yellow stars; 5,600 Mb/d at the end of February and 5,200 Mb/d last week). The trend (red line) is irrefutable.
