Crude oil imports

U.S. refineries are, of course, far less dependent on crude oil from the Middle East than they were before the Shale Revolution. But the cutoff in oil supplies from the Persian Gulf is forcing several U.S. refiners to look elsewhere for the mostly medium-sour crude they had been sourcing from the region.

The Trump administration announced on February 26 that it is ending Chevron’s permit to operate in oil-rich Venezuela, which will halt U.S. imports of Venezuelan crude by early April. These changes, combined with other recent developments, are likely to significantly impact complex U.S. Gulf Coast refiners relying on heavy crude. In today’s RBN blog, we’ll discuss these impacts — an issue our Refined Fuels Analytics (RFA) practice examined in its recently updated Future of Fuels report. 

The Biden administration has been on a mission for more than a year to restock the Strategic Petroleum Reserve (SPR), which was tapped at unprecedented levels in an effort to keep crude oil and refined product prices under control after Russia’s invasion of Ukraine in early 2022 disrupted energy flows globally. But if returning all of the released 180 MMbbl and replenishing the SPR to pre-war levels was the plan, they’ve got a long way to go. In today’s RBN blog, we examine the steps the administration has taken to replenish the reserve and the headwinds it faces.

When the Group of Seven (G-7) countries placed a $60/bbl cap on the price of Russian crude oil in December 2022 — one of many responses to Russia’s February 2022 invasion of Ukraine — there were two primary goals. The first was to keep Russian barrels flowing to the market to help keep global prices in check, and the second was to slash the profitability of Russian oil exports and thereby reduce its ability to wage war against Ukraine. In today’s RBN blog, we look at how effective the sanctions have been and how Russia has tried to work around the price cap. 

It seems like everyone has an opinion about the Strategic Petroleum Reserve (SPR), and everyone is at least a little bit right. For example, many assert the SPR provides a helpful crude oil supply buffer in the event of a major disruption from, say, a strong hurricane in the Gulf of Mexico or a war in the Middle East. Others say the market can take care of itself — the SPR just muddies the waters by getting government (and worse yet, politicians!) involved. Still others say the oil market has changed dramatically since the SPR was established almost a half-century ago and that the strategy behind the reserve should be revised in response to those changes. In today’s RBN blog, we discuss the very gradual refilling of the SPR after a big draining — and an ongoing debate about the reserve’s future.

Canada may be the land of backyard hockey, lacrosse, and loonies, but Canadians have many similarities to folks in the U.S. The same holds true for Canada’s refining sector, which like its American counterpart has been adjusting to big changes in domestic crude oil production, a declining need for imported oil, and, most recently, a period of severe refined-product demand destruction caused by the pandemic. What Canadian refiners lack, though, is the attention they deserve. After all, nearly 2 MMb/d of crude oil flows through their 17 refineries. And, by the way, they now turn to U.S. producers for virtually all their oil imports — a far cry from where things stood before the Shale Era. Today, we kick off a three-part series that examines Canada’s refining sector in greater detail.

PADDs 4 and 5 — the Rockies and the West Coast regions, respectively — are each outliers in the U.S. refining sector. Refineries in the Rockies, for example, are generally far smaller than those in other PADDs and, due to pipeline flows, source their crude oil from either Western Canada, the Bakken, or in-region production, including the Niobrara and Utah’s Uinta Basin. West Coast refineries, in turn, have no crude oil pipeline links with U.S. points to the east, and depend on a mix of imported crude from Canada, Latin America, and the Middle East, as well as domestic oil from California, Alaska, and rail receipts. Today, we conclude a series on region-by-region crude oil imports and refinery crude slates with a look at PADDs 4 and 5.