Crude Oil

The Nederland/Beaumont crude oil hub has been somewhat overshadowed recently by other Gulf Coast crude export hubs despite hosting America’s largest refinery, a handful of export terminals and pipeline links to the prolific Permian Basin. But while plans to build one or more deepwater crude export terminals could mean big changes for the Gulf Coast hubs, the Nederland/Beaumont area isn’t standing still. In today’s RBN blog, we discuss what’s ahead for the region and its emergence as a leader in NGL exports. 

Bluewater Texas, proposed by a 50/50 joint venture (JV) of Phillips 66 (P66) and commodity trading giant Trafigura, is in a unique position in the race to construct a deepwater crude oil export facility along the U.S. Gulf Coast. Of the four marketed deepwater proposals, Bluewater is the only project in the export-centric Corpus Christi market. It is also the only one in the group that does not include an offshore platform in its scope. In today’s RBN blog, we will explore these and other differences that set Bluewater apart. 

If you asked someone where U.S. crude oil shipments would go when the Obama administration ended the ban on most crude exports in December 2015, it’s not likely that Nigeria would have come to mind. Yet this year marked the second time since the restrictions ended that U.S. oil has been sent to the OPEC member, this time to feed its long-awaited Dangote refinery. In today’s RBN blog, we will examine this development and the prospects for more U.S. exports to the West African nation. 

The Houston crude oil hub has become busier over the last few months, and if one or more proposals to build a deepwater export terminal nearby capable of fully loading a Very Large Crude Carrier (VLCC) cross the finish line, it could become the hub supplying them. That could push Permian Basin oil flows on Houston-bound pipelines higher at the expense of flows to Nederland and Corpus Christi. In today’s RBN blog, the third in a series, we will examine the latest Permian oil flows to Houston and how that could change if and when a deepwater project comes online. 

For the past decade, producers in the Permian Basin have been the driving force in domestic production growth, but lately there has been a hard-to-miss slowdown in incremental production rates for crude, gas and natural gas liquids (NGLs). While Permian producers are primarily motivated by crude oil economics, those volumes also come with a lot of associated natural gas and NGLs. These commodities are therefore fundamentally interlinked. So if there’s a hangup with one, the effects will be felt across the upstream and then cascade downstream. There is a lot of money riding on these markets and the impacts of an extended slowdown in the Permian could be monumental, not just in the energy industry but also in the broader U.S. and global economies. In today’s RBN blog, we will examine what’s to blame for plateauing production in the U.S.’s most prolific basin and gauge what its big-picture implications might be. 

Mexico’s efforts to start up the newest addition to its refining system — the Olmeca refinery — are causing headaches for global buyers of its crudes. Few are convinced that the plant near the country’s key Dos Bocas oil port is ready for service. Yet its operator, Petróleos Mexicanos (Pemex), surprised many with cuts to its crude exports in April, which were reportedly made to ensure the complex will have enough feedstock and could continue through 2024. In today’s RBN blog, we will discuss what led to the export cuts, the implications for importers, and potential replacement options. 

The prospect of decreased crude oil supplies from Mexico, the top international supplier to the U.S. Gulf Coast (USGC), is creating uncertainty among heavy crude-focused refineries. Mexico’s state-owned energy company, Petróleos Mexicanos (Pemex), instructed its trading unit to cancel up to 436 Mb/d of crude exports for April to supposedly focus on processing domestic oil at its new 340-Mb/d Dos Bocas refinery and/or its existing plants. While the refinery’s startup is likely not nearly as imminent as Pemex says, the cancellation of Mexican crude imports could be problematic for U.S. refiners with plants built to run heavy crude, a necessary ingredient to optimize operations and yields. Adding to the complexity of the situation is the upcoming startup of the Trans Mountain Pipeline expansion (TMX) and the recent reinstatement of U.S. sanctions on Venezuelan crude. In today’s RBN blog, we’ll examine the potential fallout resulting from Pemex’s decision at a time when heavy crudes elsewhere are also becoming less available.