Product Exports

The world is full of paradoxes and apparent contradictions, like the phrase “this page intentionally left blank” on an otherwise empty page in a government report, and the energy sector is no different. The U.S. is the world’s largest exporter of the “Big 3” petroleum products — gasoline, diesel/gasoil and jet fuel/kerosene — but it still imports significant volumes of those very same products. That paradox, which is not unlike the U.S.’s need to both export and import various grades of crude oil, is tied to a mismatch between where the product is produced and where it is consumed. In today’s RBN blog, we look at the factors that contribute to that mismatch and what it means for U.S. “Big 3” production and exports going forward.

The past four years have seen a boom in U.S. refining with strong margins and increased throughput.  The balance of refinery feedstock has changed from a majority of imports to a majority of domestic crude. Market inefficiencies – in the distribution system, crude quality mismatches and export restrictions have kept U.S. crude prices below international levels – bringing refiners high margins and competitive product exports. Today we look at how refiners have benefited from changing U.S. crude supplies.