The monthslong closure of the Strait of Hormuz has spurred a dramatic ramp-up in crude oil exports from the U.S. Gulf Coast (USGC) this spring as a wide range of international buyers scrambled to replace oil stranded in the Persian Gulf. That surge in U.S. exports has prompted two big questions: (1) how much crude oil can USGC marine terminals reliably send out on a sustained basis and (2) does the region need more crude export capacity, especially if the Iran conflict drags on and buyers increasingly turn to U.S. suppliers to fill the gap. In today’s RBN blog, we’ll discuss recent USGC export volumes, what they reveal about the region’s true export limits, and how the region’s export capacity could be impacted by Sentinel Midstream’s newly sanctioned Texas GulfLink project.
Estimates vary, but given that some 12 MMb/d of crude oil had been transiting the Strait of Hormuz prior to the Iran conflict, it’s safe to say that more than 800 MMbbl of predominantly light and medium sour oil has failed to exit the Persian Gulf region since hostilities began on February 28 (70-odd days times ~12 MMbbl). There’s no way that massive volume of crude can be replaced in short order, but the countries that had been the most dependent on oil from Saudi Arabia, Iraq, the United Arab Emirates (UAE), Kuwait and Iran have been doing their best to find alternative sources — and fast! — for as much replacement oil as they can get their hands on.
The U.S. has, of course, been a primary source due to its abundance of mostly light sweet shale oil and — thanks to the ongoing release of 172 MMbbl from the Strategic Petroleum Reserve (SPR) — substantial volumes of medium sour oil too. (Of the 86 MMbbl the U.S. offered in its first SPR tranche in April and May, a hefty 76 MMbbl was medium sour; the other 10 MMbbl was light sweet.) According to RBN’s weekly Crude Voyager report, USGC terminals sent out more than 5 MMb/d for a record three weeks in a row: more than 5.1 MMb/d the week ended April 17, an all-time high of 5.8 MMb/d the week ended April 24, and nearly 5.7 MMb/d the week ended May 1. As shown in Figure 1 below, terminals in Corpus Christi sent out nearly 3.1 MMb/d the most recent week (light-blue layer), while Houston-area terminals exported just over 2 MMb/d and terminals in Beaumont, TX, (orange layer) and Louisiana (lavender layer) shipped 214 Mb/d and 350 Mb/d, respectively.
Figure 1. Weekly Gulf Coast Crude Oil Exports. Source: Crude Voyager
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About the song
“How High” was written by Reggie Noble (Redman), Erick Sermon, and Clifton Smith Jr. (Method Man). It appears as the seventh song on The Show: The Soundtrack album produced by Russell Simmons for the 1995 Brian Robbins film of the same title. The song is a stoner anthem celebrating camaraderie, having fun, and smoking the evil weed. It was the first official collaboration between rappers Method Man of Wu-Tang Clan and Redman of Def Squad. The duo remixed the song and included it on their debut album, Blackout, released in September 1999, and included it in the soundtrack to their 2001 film of the same name. Released as a single in August 1995, it went to #2 on the Billboard Rap Songs chart and #13 on the Billboard Hot 100 Singles chart. It has been certified Gold by the Recording Industry Association of America (RIAA). Personnel on the record were: Method Man (vocals, Redman (vocals), Brendon O'Brien, Dexter Simmons, Erick Sermon, Ivan Rodriguez, Jack Hersca, Jose Reynoso, Mathematics, Mike Wilson, Noel Campbell, Paul Logus, Rich Keller, Tommy Uzzo, Troy Hightower, and Wassim Zreik (programming, sampling, engineering).
The album, The Show: The Soundtrack, is the soundtrack to Brian Robbins’s hip-hop film of the same name, released in August 1995. It features several hip-hop artists such as 2 Pac, Kid Creole, Dr. Dre, Snoop Doggy Dog. L.L. Cool J, Method Man, and Redman. The album was released in August 1995 and went to #1 on the Billboard Top R&B/Hip-Hop Albums chart and #4 on the Billboard 200 Albums chart. It has been certified Platinum by the RIAA. Two singles were released from the LP.
Method Man and Redman are an American hip-hop duo that have been collaborating since 1994. They have released two studio albums, one soundtrack album and eight singles. Method Man (Clifford Smith Jr.) is an American rapper, record producer, and actor. As a solo artist, he has released seven studio albums and 34 singles. He is also a member of the popular East Coast rap group, Wu-Tang Clan. He is currently on tour in the U.S. Redman (Reggie Noble) is an American rapper, record producer, and actor. As a solo artist, he has released nine studio albums, one soundtrack album, one EP and 28 singles. He is currently on tour in Europe.
"About the Song" -- written by Mickey McMahan , RBN Director of Musicology
