Just 20 years after Colonel Edwin Drake drilled the first commercial oil well in Titusville, Pennsylvania in 1859, the United States was responsible for 85% of the world’s crude oil production and refining. But over the next century, the country became increasingly dependent on oil imports, at times worryingly so. Thanks to the shale revolution, the United States is now on the brink of a sea change in the dynamics of supply and demand for crude oil, gasoline, diesel, jet fuel, and other shale-derived products. oil In the coming years, as U.S. crude oil production continues to rise, essentially all of the incremental barrels will flow to export markets, possibly through one or more of the new offshore terminals under development on the Gulf Coast. of the USA. Export growth, and the midstream infrastructure needed to facilitate it, was one of many topics covered at our recent xPortCon 2023 and the topic of today’s RBN blog, which also announces the availability of conference videos full to the gills from last Thursday.
At the time of our previous xPortCon held in 2019, US crude production had increased to nearly 12 Mb/d, oil exports had soared to about 2.5 Mb/d we were in the cusp of a large increase in pipeline capacity outside the Permian Basin, with an additional 2.1 Mb/d headed to Corpus Christi, most of which was destined for export markets. But thanks to a series of unforeseen events—a global pandemic, the Russian invasion of Ukraine, inflation-driven price spikes, and a new focus on capital discipline by E&Ps—things didn’t turn out that way. we, nor anyone else, expected. . We thought US production would be 15 Mb/d by now, with exports at 5 Mb/d. In contrast, production has only recently increased to 12.4 Mb/d (after reaching 13.1 Mb/d just before COVID), which is pretty close to where we were in 2019.
But while U.S. crude production fell to around 11 Mb/d in the depths of COVID, the percentage of that crude sent in the form of exports, which had risen steadily to 30% before pandemic, it was only modestly reduced and never dropped much below the 3 Mb/d mark. Even with production just reaching 2019 levels, crude oil exports are rising as a percentage of total production. The United States now exports about a third of its crude output, averaging 4.1 Mb/d over the past six months, with some weeks exceeding 40% of total output. Energy Information Administration (EIA) data put exports at 4.8 Mb/d in March and 4.0 Mb/d in April, with weekly volumes exceeding 5 Mb/d three times this year, including a historical high of 5.6 Mb/d. in February (see Figure 1 below). So far, crude oil exports are up 15% from the 2022 average, which was up more than 20% from the 2021 average.
