Where the Boat Leaves From - How Much More Crude Export Capacity Does the U.S. Really Need?

Crude oil production in the U.S. continues to rise — it currently stands at 12.4 MMb/d, up more than 1.6 MMb/d from 12 months ago, according to the most recent data from the Energy Information Administration (EIA). New pipeline projects from Cushing and West Texas to the Gulf Coast are being developed to ensure there is enough flow capacity to move all those barrels from the wellhead to refineries and export docks. Which leads to two critical questions — namely, how much actual crude oil export capacity is already in place at the Gulf Coast, and how much more needs to be developed? Today, we begin a series presenting our latest analysis of crude oil export capacity in the U.S., our forecast for total export demand, and our view of what it all means for the large slate of potential projects.

In our Gulf Coast Highway blog, we noted that U.S. crude oil export volumes have grown substantially since the ban on most crude exports was lifted in December 2015. After doubling from nearly 600 Mb/d in 2016 to 1.2 MMb/d in 2017, export volumes increased again last year (averaging 2 MMb/d; stair-stepped purple line in Figure 1). So far in 2019, crude oil exports have been averaging just over 2.7 MMb/d after hitting an all-time high of 3.6 MMb/d in mid-February. The demand to ship barrels overseas shows no signs of slowing, and for good reason. Crude exports are being driven by simple fundamentals, all of which point to continued growth in crude oil volumes moving out of the Gulf Coast and into international markets.

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