Massive shifts are occurring in the U.S. crude oil export market, but you wouldn’t know it from the steady-as-she-goes pace of activity. The volumes being loaded along the Gulf Coast have stayed within a relatively tight range — 2.5 MMb/d to 3.2 MMb/d — for 12 consecutive quarters now, and the export pace for each of the past three quarters has remained within a few thousand barrels of 3 MMb/d. So, what’s changed? For one thing, Corpus Christi is now by far the dominant point of export, with Houston, Louisiana, and Beaumont/Nederland trailing. Another is that Europe, heavily impacted by the sharp decline in imports from Russia, is now the leading destination for U.S. barrels. There are other changes, too, including increased use of Very Large Crude Carriers (VLCCs) and terminal expansion projects. In today’s RBN blog, we discuss highlights from our recently published Crude Voyager Quarterly Report.
When fully loaded with 2 MMbbl of crude oil, a VLCC in some ways resembles an alligator moving stealthily along a Florida lake, its body largely submerged with only a sliver of the beast visible above the waterline. The same could also be said of U.S. crude exports — a lot of what’s happening is occurring beneath the surface. As we said in our introduction, export volumes have remained remarkably stable over the last three-plus years. It’s difficult to tell just from looking at the totals that since mid-2019 the world has endured a once-a-century pandemic that crushed demand for oil and refined products and sent crude prices tumbling. There is also little to indicate that earlier this year Russia — one of the world’s three leading oil producers along with the U.S. and Saudi Arabia — invaded Ukraine, spurring not only Europe’s first major land war since World War II but an “energy war” the likes of which none of us has ever seen. And don’t forget the ongoing “energy transition,” a key element of which would presumably aim to ratchet down the role of oil and other hydrocarbons.
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