Crude oil exports are hitting record volumes. Geopolitical dislocations, regional capacity constraints, and transport cost aberrations are upending global trade flows. These developments have a direct impact on U.S. export grades, prices, and the utilization of pipelines and terminals. Petroleum product exports have an equally formidable set of challenges. U.S. surpluses of refined products are growing as domestic demand falls and biofuel penetration increases. The impact will translate directly into shifts in flows between PADDs, the repurposing of infrastructure, and more exports from the Gulf Coast. We’ll be exploring these and many more developments at our upcoming conference, xPortCon-Oil 2023, to be held in Houston on June 8, 2023. In this blatantly advertorial blog, we will introduce the major topics to be covered at the conference, who will be participating, and why we believe this will be the most important industry gathering for crude and products markets this year.
As we have covered in several recent blogs, exports are now Calling the Shots in U.S. liquid fuel flow patterns, price differentials, infrastructure utilization and, to a great extent, the winners and losers in crude oil and product markets. We documented how a whopping 60% of crude oil produced in the U.S. is exported, either as crude or in the form of gasoline, diesel, jet fuel or other petroleum products. Of course, this number must be taken in context of the significant volumes of crude and products that are still imported. But the reality is that U.S. net imports are dwindling toward zero — and if you throw NGLs into the liquid fuels balance, the U.S. has been a net exporter of liquid fuels since 2020. We’ve addressed Permian crude flows to Corpus Christi and Houston, how the U.S. will become a leading exporter of renewable diesel and sustainable aviation fuel, the impact of crude flows on infrastructure requirements (driving plans by Enbridge and Enterprise), and what all this has meant for crude pricing mechanisms (Trading in the USA).
Figure 1 puts the crude oil export growth issue in perspective. After the crude export ban to countries other than Canada was lifted at the end of 2015, export growth started off slowly in 2016 and 2017, averaging 230 Mb/d and 800 Mb/d, respectively. But then overseas exports (blue layer) took off, soaring to an average of 2,650 Mb/d from 2019 through 2021. Then, as shown in the right inset, total exports ramped up to average 3,600 Mb/d in 2022 (dashed gray horizontal line) and exceeded 5,000 Mb/d twice so far this year in EIA weekly numbers (yellow stars; 5,600 MMb/d at the end of February and 5,200 Mb/d last week). The trend (red line) is irrefutable.
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