As global oil markets shift their attention from U.S. shale oil production back to a resurgent Saudi Arabia and Russia and geopolitical concerns bearing down on oil prices, Citigroup said last Wednesday that the U.S. is poised to surpass Saudi Arabia next year as the world’s largest exporter of crude and oil products.
The U.S. exported a record 8.3 million barrels per day (bpd) last week of crude oil and petroleum products, the government also said Wednesday. Top crude oil exporter Saudi Arabia’s, for its part, exported 9.3 million bpd in January, while Russia exported 7.4 million bpd, the bank added.
However, it should also be noted that the Citi projection is for both crude and finished (refined) petroleum products, not only crude oil. Saudi Arabia remains the world’s largest exporter of crude, though since January amid the OPEC/non-OPEC production cut agreement that figure has fallen. On April 10, the Saudi oil minister said that the kingdom planned to keep its crude oil shipments in May below 7 million bpd for the 12th consecutive month.
Saudi Arabia has also trimmed its oil production more than 100 percent of the output cuts it agreed to under the January 2017 production deal. In March, Saudi crude production was at 9.91 million bpd, below the deal’s output target of 10.058 million bpd.
Russia, however, also part of the global oil protection cut agreement, increased its crude oil production by 0.2 percent to 10.97 million bpd in March, compared to the previous month and an 11-month high.
Though Citi has projected that the U.S. could bypass Saudi Arabia in the export of crude and petroleum products, U.S. crude oil exports have been relatively low compared to other major oil producers since the Obama Administration lifted the ban of American crude oil exports in 2015.
Nonetheless, U.S. crude exports are poised for an upward trajectory. On Wednesday, the U.S. Energy Information Administration said the U.S. crude exports last week increased by 582,000 bpd to 2.331 bpd, an all-time high.
Profiting from arbitrage
The reason for the spike in exports also comes from the price divergence (arbitrage) between London-traded, global benchmark Brent crude and NYMEX, U.S.-benchmark, West Texas Intermediate (WTI) crude prices. As the spread between the two benchmarks widens, WTI trades at a significant cost advantage against Brent as well as other crude benchmarks. The WTI discount is a boon for refineries, particularly in Asia, that need the light sweet crude which yields higher priced refined petroleum products.
U.S. crude is also competing for market share in China against traditional exporters Saudi Arabia, Russia and Iran. China for its part seems to be pivoting away from Saudi oil as the kingdom continues to increase its official selling price (OSP) for Arab Light crude.
On Tuesday, Unipec, the trading arm of state-run Sinopec Group, said that it plans to continue to cut their Saudi Arabian crude oil purchases for June and July loadings, after slashing May shipments by 40 percent. Unipec executives said that Arab Light crude is no longer competitive against other crude blends. Unipec executives have said previously that such prices increases were “unreasonable.” Sinopec is Asia’s largest refiner.
Saudi Aramco is expected to raise its OSPs by at least 50 cents a barrel for June cargoes to track increases in benchmark Middle East crude Dubai this month, Reuters said, citing two traders that participate in the market.
Russia overtook Saudi Arabia as China’s top crude oil supplier in 2017. Saudi Arabia remained the second largest supplier to China in Q1 this year, although its exports were down 5.7 percent from a year ago.
U.S. crude is also finding more buyers in Europe due to the Brent/WTI arbitrage. Market sources have estimated U.S. exports to Europe would average 800,000 bpd between mid-May and mid-June, including 25 million barrels in May overall. One source, according to a report in Hellenic Shipping News, said that of the 25 million barrels expected to land in May, 15 million barrels had already been placed with end-users.
“We are seeing record arrivals from the US to Europe,” a trader said, adding that while all sorts of grades were crossing the Atlantic, WTI Midland represented the largest portion.
MASTERMIND on Fri, 4th May 2018 5:24 pm
However, it should also be noted that the Citi projection is for both crude and finished (refined) petroleum products,
Too bad they didn’t note that in their title..I guess that would have spoiled all the fun!
rockman on Fri, 4th May 2018 5:44 pm
MM – And some more details to go along with their generalities. From
https://oilprice.com/Energy/Crude-Oil/US-Oil-Has-One-Fatal-Weakness.html
“Last year, 51 percent of the 8.4 million bpd of crude oil produced in the Lower 48 States was light oil, or less dense oil with an API gravity of 40.1 or above, EIA data shows. The higher the API gravity, the lighter the oil. So far this year, much of the lower 48 states’ crude oil production had 30.1 or higher API gravity.
Due to the wide discount of the U.S. benchmark WTI to Brent in recent months, American exports have seen record-high levels.
Yet, according to Pisgah Partners’ Barnes, there are several demand and supply factors that may limit the buyers’ willingness to import extra light U.S. oil.
Related: Goldman: OPEC Deal Far From Certain
One is that Libya and Nigeria—the two members exempt from OPEC’s production cuts—have started to gradually recover their production that had been plagued by militant and civil strife last year. And they are exporting light sweet crude oil varieties to refiners.
Also, consumption of various oil products outside the U.S. “argue for processing middle-gravity crudes such as Arab Light, Iranian Light and Russian Urals, rather than extra-light barrels such as 48°API gravity Eagle Ford,” Barnes said.
Import data about U.S. crude sales in some Asian market suggests that Japan and India, for example, aren’t looking for extra light barrels from the U.S. Japan’s crude oil imports from the U.S. have a weighted average API gravity 36.9, Barnes writes, quoting data by the Petroleum Association of Japan. India, for its part, is said to have recently imported WTI and Southern Green Canyon, whose API gravity is 40 and 28, respectively.”
MASTERMIND on Fri, 4th May 2018 5:59 pm
Chevron CEO warns US shale oil alone cannot meet the world’s growing demand for crude
https://www.cnbc.com/2017/05/01/us-shale-cannot-meet-the-worlds-growing-oil-demand-chevron-ceo-warns.html
It takes 2,500 shale wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to IEA. Iraq could do the same with 60 conventional wells.
https://www.bloomberg.com/news/articles/2014-02-27/dream-of-u-s-oil-independence-slams-against-shale-costs
The IEA is grossly overestimating shale growth
https://oilprice.com/Energy/Oil-Prices/The-IEA-Is-Grossly-Overestimating-Shale-Growth.html
Peak U.S. Shale Could Be 4 Years Away
https://oilprice.com/Energy/Crude-Oil/Peak-US-Shale-Could-Be-4-Years-Away.html
Shale Trailblazer Turns Skeptic on Soaring U.S. Oil Production
https://www.wsj.com/articles/shale-trailblazer-turns-skeptic-on-soaring-u-s-oil-production-1520257595
Shale Produces Oil, Why Not Cash?
https://www.wsj.com/articles/shale-produces-oil-why-not-cash-1498486995
makati1 on Fri, 4th May 2018 6:24 pm
“U.S. To Become World’s Top Oil Exporter”
HAHAHAHAHAHAHA! SUCKER BAIT!
Davy on Fri, 4th May 2018 6:42 pm
3rd world it sucks when your agenda evaporates doesn’t it. You are another one I have shown the door to so many times your ass must be sore.
makati1 on Fri, 4th May 2018 6:54 pm
Davy, you keep living in that world of delusion. You believe all of the Us propaganda bullshit. So be it. What can be expected from a brainwashed goat herd living off of his family.
Newfie on Fri, 4th May 2018 7:05 pm
Um… Excuse me but… The US produces (at most) 10 million barrels a day. If they export 8 million barrels a day, then there is only 2 million barrels left for domestic consumption. But the USA consumes 20 million barrels a day. Therefore they must be importing 18 million barrels a day. It’s meaningless to state how much oil is exported without stating how much is imported.
MASTERMIND on Fri, 4th May 2018 7:32 pm
The Roman circus, the Aztec sacrifices, the Inquisition bonfires, the Nazi death camps – all have been the work of highly civilized societies.’ In the twentieth century alone, at least ioo million people, mostly civilians, died in wars.
Ronald Wright.
A Short History of Progress
MASTERMIND on Fri, 4th May 2018 8:05 pm
The final stages of capitalism, Karl Marx predicted, would be marked by global capital being unable to expand and generate profits at former levels. Capitalists would begin to consume the government along with the physical and social structures that sustained them. Democracy, social welfare, electoral participation, the common good and investment in public transportation, roads, bridges, utilities, industry, education, ecosystem protection and health care would be sacrificed to feed the mania for short-term profit. These assaults would destroy the host. This is the stage of late capitalism that Donald Trump represents.
-Chris Hedges
https://imgur.com/a/04DEmGp
makati1 on Fri, 4th May 2018 8:08 pm
MM, I concur with his observation. Capitalism is basically dead. The carrion eaters are feeding off of the corpse. Do you have plans for after? I do.
Davy on Fri, 4th May 2018 8:10 pm
wow, listen to the two economic experts. LOL, wow, you guys are so smart.
Boat on Fri, 4th May 2018 8:18 pm
Back at the ranch California overtook the UK as the world’s 5th largest economy.
Boat on Fri, 4th May 2018 8:21 pm
Newfi
Your oil numbers show a severe lack of Google skills and a wild imagination.
Wolfie52 on Fri, 4th May 2018 8:22 pm
Wow all of the trolls still at it. Really guys, take my advice and get out of mom’s basement and open your worldview.
I am totally amazed that I can come on PO every 3 months and see the same 5-7 people arguing/agreeing with the EOW BS.
GAL (Get a life.)
Wolfie52 on Fri, 4th May 2018 8:24 pm
I will say I am happy I don’t have to see that idiot skeleton GIF from Rocketidiot anymore…small consolation.
MASTERMIND on Fri, 4th May 2018 8:25 pm
Not the ‘preppers’ you see on TV: America’s wealthy take ‘prepping’ seriously
https://sofrep.com/102669/not-the-preppers-you-see-on-tv-americas-wealthy-take-prepping-seriously/
Boat on Fri, 4th May 2018 8:29 pm
Mak
If you were a barrel counter you could say specifically what is happening in the US and the world. By remaining ignorant you are reduced to…..”SUCKER BAIT.
onlooker on Fri, 4th May 2018 8:47 pm
Yes, MM, the wealthy and/or insiders seem to be hedging on Collapse . It is where the smart money is going
Newfie on Fri, 4th May 2018 9:15 pm
Please point out the error in the numbers I stated.
makati1 on Fri, 4th May 2018 9:17 pm
Boat, “Barrel counters” are deluding themselves into believing just what they want to believe. I could care less if there is a barrel left or a trillion barrels. The pumps will shut down when the EROEI drops below the ability to support the end use. We are fast approaching that point. All the money on the world cannot change the laws of physics. There will still be billions of barrels of oil in the ground and they will stay there. Only the Wall Street Suckers believe different.
Look in the mirror, Boat. “By remaining ignorant you are reduced to…..”SUCKER BAIT.”
MASTERMIND on Fri, 4th May 2018 9:37 pm
This article reminds me of a quote
And if you gaze long enough into an abyss, the abyss gazes back into you.
-Nietzsche
MASTERMIND on Fri, 4th May 2018 10:28 pm
FBI: More active shooting incidents in 2017 than any other year recorded
https://www.usatoday.com/story/news/2018/05/04/fbi-active-shooter-increase-2017-high-death-toll/581198002/
MASTERMIND on Fri, 4th May 2018 10:49 pm
Trump’s first year.
Record number of drug overdoses. Record number of category four hurricanes making landfall. Record number in retail store closures. And record number of active shooting incidents….
https://www.youtube.com/watch?v=9Jz1TjCphXE
Boat on Fri, 4th May 2018 10:55 pm
Mak
As the numbers show the US still net imports 3.5 mbpd. Do you know what that means? Quit blathering rhetoric. You and this Tim character are lost. That comes from posting shyt with an agenda. Saying eroei is fast approaching the ability to support the bend user is also shyt and about as stupid as the idea of the US being the lead exporter.
MASTERMIND on Fri, 4th May 2018 11:15 pm
Trump is the fourth horseman of the apocalypse. He practices all the sins. Greed, Gluttony, Sloth, Envy, Banging porn stars etc. I’m an atheist but even I can spot a false prophet and an actual anti-Christ when it’s this obvious.
MASTERMIND on Fri, 4th May 2018 11:16 pm
Boat
The EROEI claim is true.
Inside the new economic science of capitalism’s slow-burn energy collapse (Ahmed, 2017)
https://medium.com/insurge-intelligence/the-new-economic-science-of-capitalisms-slow-burn-energy-collapse-d07344fab6be
And those three peer reviewed studies were done just last year. So I don’t want to hear any excuses.
makati1 on Fri, 4th May 2018 11:32 pm
Boat, quit pretending that you are anything but an oily investor that dreams big and ignores reality. You are so suckered that you cannot even imagine a world without the market casino. I can, and it is coming. Imports/Exports will mean shit when the SHTF. I have no stock investments and never did. I’m no fool.
Boat on Fri, 4th May 2018 11:32 pm
Mm
As the years go by the number of proved reserves keeps going up. The two biggest fields in the world keep finding more oil. Google sometime.
The world has Nat gas out the ass. Nuke electric is being pushed out by renewables. Less money is spent on energy/energy intensity. A long trend. You sound like a shortonoil convert. Where did that punk go anyway.
Boat on Fri, 4th May 2018 11:38 pm
Mm
Where is the saudi eroei and the Permian. Let’s compare. Oh we can’t. What is the eroei by country by year by energy source. Shyt. No credible source exhists. Show me all the stats. They don’t exhists
MASTERMIND on Fri, 4th May 2018 11:40 pm
Boat
HSBC Global Bank: 81% of world liquids production already in decline and world oil shortages ahead
https://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017
Projection of World Fossil Fuels by Country (Mohr, 2015)
https://www.scribd.com/document/375110317/Projection-of-World-Fossil-Fuels-by-Country-Mohr-2015
A Regional Oil Extraction and Consumption Model. (Dittmar 2017)
https://arxiv.org/pdf/1708.03150.pdf
Shell forecasts global Natural Gas supply shortage in mid-2020s
https://www.cnbc.com/2018/02/26/shell-warns-of-lng-shortage-as-demand-for-liquefied-natural-gas-booms.html
Chevron expects global Natural Gas supply shortage by 2025
https://www.reuters.com/article/us-chevron-lng/chevron-expects-lng-supply-shortage-by-2025-idUSKCN1GI2EH
MASTERMIND on Fri, 4th May 2018 11:41 pm
Boat
Here are 65 Peak oil references
https://imgur.com/a/rBtIrfg
Boat on Fri, 4th May 2018 11:43 pm
Mak
You and Fox news push gold and silver. Lol Remember the crash of 2013-2014 that didn’t happen? Good investment Gulliver in the land of lillyput.
makati1 on Fri, 4th May 2018 11:43 pm
MM, that article is correct except…he uses EROI and not EROEI, two different things.
EROI is Energy Return On Investment $$$$
EROEI is Energy Return On Energy Invested, which is what I commented on. Oil can be $1,000/bbl but if it takes a barrel of oil energy to get a barrel of oil energy to the gas pumps, game over. Some say that if it even takes a barrel of oil to get 10 barrels to the end user, the wells will close.
He is correct that capitalism is dying. What will replace it? A blend of communism and socialism? Think China or Russia. The next few years are going to be very, very interesting.
makati1 on Fri, 4th May 2018 11:47 pm
Boat there are real things and then there are faux things. Stocks are faux things. Gold has held value for, oh, 10,000 years. It’s value is not going to vanish because a few chicken gut readers who call themselves “economists” or “financial advisors” say so. The countries stocking up on real wealth will weather the coming collapse just fine. The US will die because it has no real wealth, just “faith”. LMAO
Boat on Sat, 5th May 2018 12:01 am
Mak
Did you know wind is now providing power at a US refinery? Nat gas heats the oil at many refineries. Solar heats the oil for extraction in the middle east. If oil stays at a high price for an extended period of time you don’t think oil producers will innovate and find a cheaper alternative? You don’t know Texas.
Boat on Sat, 5th May 2018 12:03 am
Mm
Give me comprehensive eroei stats. NOW!! Lol punk.
Boat on Sat, 5th May 2018 12:13 am
Mak
I am not an oil or Nat gas fan. I try to be a realist. I am in the market for only one reason. To make money. Doesn’t mean I am a fan.Its just a tool. Your an emotional guy. Me, not so much. Wants and desires have little play in decisions. Fan of? Sports, used to play them, now I watch them. PS the rockets just kicked ass.
MASTERMIND on Sat, 5th May 2018 12:24 am
Boat
I just gave you an article with two studies that calculated EROEI. If you just want to ignore everything you are never going to learn.
MASTERMIND on Sat, 5th May 2018 12:25 am
Boat
It’s you’re..You uneducated neckbeard!
Boat on Sat, 5th May 2018 12:28 am
Mm
I started reading one link, a crowd funded liberal thinktank. Facts kid, not politics.
Anonymouse1 on Sat, 5th May 2018 12:42 am
He a retard eceptionalturd. But you only seem capable of pointing out his blanket stupidity as ‘mushmind’, not as davyturd. Whatever….
makati1 on Sat, 5th May 2018 1:55 am
Boat, and I guess everyone else is in the market for fun? You are not a realist. You are a dreamer who is going to get his financial ass handed to him by the super computers that will drain the market when it starts to go. They will be out of it in a millisecond with the profits. Wait and see. You will get nothing. You don’t seem to get it that the House always wins. Always. Its the little guys like you that are the suckers. I don’t play in rigged games.
Dredd on Sat, 5th May 2018 3:44 pm
Exporting what we import (How Wall Street Enabled the Fracking ‘Revolution’ That’s Losing Billions).
Oil-Qaeda on welfare.
Harquebus on Sat, 5th May 2018 4:45 pm
EROEI is, in my opinion, a valid concept and is gaining acceptance in the scientific community. I have been promoting it for quite some time.
https://www.peakprosperity.com/podcast/113808/dr-charles-hall-laws-nature-trump-economics
onlooker on Sat, 5th May 2018 4:53 pm
Our distorted Economics with rampant lending/debt, speculative investing and mortgaging our future is ignoring and obscuring geophysical cues like EROEI that could alert us to imminent discontinuities of key human systems
Cloggie on Sat, 5th May 2018 5:08 pm
“EROEI is, in my opinion, a valid concept and is gaining acceptance in the scientific community. I have been promoting it for quite some time.”
There is no agreement about energy input, hence it is a useless parameter.
Harquebus on Sat, 5th May 2018 5:19 pm
Cloggie
I have had many arguments concerning the boundaries of EROEI analyses. Ultimately, there are none. When totaling inputs, the tally can be stopped when the result approaches 1 which, it will always do. Hence, the preference by some to impose boundaries.
Cloggie on Sat, 5th May 2018 5:31 pm
If the employee of a solar panel factory drives to his work in an SUV, does the embedded energy of the SUV count as solar panel energy input? What about the SUV of his stay-at-home wife?
makati1 on Sat, 5th May 2018 6:01 pm
Cloggie, yes it does. ANY energy input that is required to get that panel made and hooked up on your roof is part of the total energy required to get your “renewable” electric. Including his salary, bennies, etc. ALL energy input that makes the panel possible is added in. The list is almost endless, starting at the mines. THAT is why the so called “renewables” are not renewable without FF input. To ignore that is to be in denial.
Kat C on Sun, 6th May 2018 3:16 am
2017 numbers
US production 9 mbpd
https://www.eia.gov/tools/faqs/faq.php?id=268&t=6
US use almost 20 MBPD
https://www.eia.gov/tools/faqs/faq.php?id=33&t=6
US export 6 mbpd
https://www.eia.gov/dnav/pet/pet_move_expc_a_EP00_EEX_mbblpd_a.htm
US import 10 mbpd
https://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbblpd_a.htm
9 produced +10 imported = 19
19 available -20 used -6 exported = negative 7
EIA’s figures don’t add up. Newfie is right.