By - Jim Vess

U.S. is exporting a record amount of oil to a record number of markets, EIA says

Energize Weekly, October 30, 2019

U.S. crude oil exports increased to an average 2.8 million barrels a day for first seven months of 2019, sending oil to as many as 31 different markets per month, according to the federal Energy Information Administration (EIA).

The U.S. is now exporting oil to more markets than places from which it is importing oil, the EIA said. In the first seven months, the largest number of foreign oil sources for imports was 27 per month compared to 37 in 2009.

Since 2017, oil exports have risen from 500,000 barrels a day to a peak of 3.2 million barrels a day in June 2019.

“This rise in U.S. export destinations coincides with the late 2015 lifting of restrictions on exporting domestic crude oil,” the agency said. “Before the restrictions were lifted, U.S. crude oil exports almost exclusively went to Canada.”

The increase in domestic oil production – which surpassed 12 million barrels a day and made the U.S. the world’s largest oil producer – has been the key to the reduced crude oil imports.

Most of the domestic output has been relatively light-sweet crude. U.S. refineries, which are configured to process medium to heavy crude oil, are using the light-sweet crude in place of imports of light and medium crude from other countries, save Canada. Refineries have also increased utilization rates.

On foreign markets, there has been a growing demand for light-sweet crude, and several infrastructure upgrades – including new and expanded pipelines, reverse pipelines now delivering crude oil to expanded export terminals – have enabled an increase in U.S. exports. The expanded export terminals can now accommodate more tanker traffic and larger crude oil tankers.

“More stringent national and international regulations limiting the sulfur content of transportation fuels are also affecting demand for light-sweet crude oil,” the EIA said. “Many of the less complex refineries outside of the United States cannot process and remove sulfur from heavy-sour crude oils and are better suited to process light-sweet crude oil into transportation fuels with lower sulfur content.”

The EIA said that the initial export market destinations, which are tracked by the U.S. Census Bureau and were used in the agency’s analysis, may not necessarily be the final destination for the shipments.

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