Peak Oil is You

Donate Bitcoins ;-) or Paypal :-)

Page added on February 19, 2020

Bookmark and Share

US Oil Export Story Has Really Just Started

US Oil Export Story Has Really Just Started thumbnail
US Oil Export Story Has Really Just Started
All told, the US could become the largest crude oil exporter within five years.

While U.S. crude oil production has soared 160 percent to 13 million b/d in the shale-era since 2008, total demand has remained flat at 19-21 million b/d. In turn, exports of crude and products have been mounting fast. The country’s immense refining infrastructure is yielding more gasoline, diesel, jet fuel, heating oil, and other petroleum products now freed up for export to foreign markets.

For crude, the surging flows from America’s shale fields have been yielding a light to even a very light grade. These oils are not a natural fit for the country’s refining system, configured to process the heavier grades historically imported from Mexico, Canada, and Venezuela. The mismatch has been augmented by a 2015 law change that allowed U.S. crude to be shipped beyond just neighbor Canada. Suddenly, from 2015 to 2019, U.S. crude exports leaped six-fold to 2.8 million b/d.


Growth has been particularly impressive since the trade war with China (having a 5 percent tariff on U.S. crude) has effectively taken the world’s biggest import market away. For example, U.S. crude exports to China in November were just 62,000 b/d, compared to 231,000 b/d in 2018. Compensating, Canada, South Korea, and the UK have become the largest U.S. crude importers. Canada, for instance, imported about 170 million barrels of U.S. crude last year. This is a staggering 11-fold boom since 2010, even more notable since Canada is itself a country with rising production amid flat demand.

Fast-growing India has also become more vital for U.S. oil exporters. The world’s third largest consumer imported almost 95 million barrels of U.S. crude in 2019, a 10-fold bounce from 2017 alone. Refinery-short Mexico has dominated product purchases, taking in some 65 percent of U.S. gasoline exports and 33 percent of diesel sales. Natural gas liquids are also quickly gaining market share in the U.S. export complex, quadrupling since 2013 to ~1.9 million b/d in 2019.

Looking forward, the U.S. oil export story has really just started. China, for instance, just announced that it will half its tariff on U.S. crude to 2.5 percent and buy nearly $55 billion in U.S. energy over the next two years. This will surely put crude in the spotlight: China still has a 25 percent tariff on U.S. LNG. The prize is obvious. At 10.2 million b/d, China’s crude imports in 2019 were up 10 percent and set a record for a 17th straight year.

The emerging USMCA deal to revamp NAFTA with Mexico and Canada will also be a boon for exporters of U.S. oil products in particular. Farther abroad, more pipeline capacity from the Permian to reach the deeper ports being constructed in the Gulf is essential to reaching full potential. All told, the U.S. could become the largest crude oil exporter within five years.

Mounting U.S. shale oil supply will remain the basis of its export boom. Even with the expected slowdown in new output, the IEA has the U.S. supplying 85 percent of the world’s new crude for this decade. The EIA has a high resource potential pushing U.S. crude output another 40 percent to possibly 18 million b/d.

New global oil demand is a constant because other options remain insignificant and more expensive. Some 90 million new oil cars are sold each year. Any drag on new consumption comes more from poor economic conditions and/or temporary downturns such as the coronavirus, not from any structural shift in usage.

Especially important amid flat domestic demand, U.S. consumers should know that the ability to sell on the global market helps companies expand operations, capturing the invaluable economies of scale where additional outputs come at a reduced cost per unit. In turn, exports leading to more output and efficient scales of operation help keep domestic prices in check.

U.S. oil exports are also essential in building partnerships around the world. Many importers see U.S. oil as a critical buffer to heavily resourced Russia and OPEC. If a new U.S. President seeks to ban oil exports, for instance, they would simply be gifting a windfall to other geopolitically risky suppliers.


8 Comments on "US Oil Export Story Has Really Just Started"

  1. Anonymouse on Wed, 19th Feb 2020 9:24 pm 

    Well, Rigporn got one thing right, for once.

    Here is the ‘story’.

    That the uS ‘producing’ 13 million b/d of oil.

    Sure it is, and I have some bridges for sale in Arizona if you are interested.

    The other part of this ‘story’, is how the uS is, or will soon be, some kind of oil exporting powerhouse.

    Bridge anyone?

    You see, both of the claims being made, are patently, and laughably, false. So what part then, did rigporn actually get right? Well, the part about it all being a story. Because that is all this is. A story, like one you tell little gullible children when you want to amuse or distract them. And that is all the story about amerika, super-oil exporter to the world is.

    A fooking story to tell little children. Sometimes, a story can be funny, or teach an important point or moral lesson, or just be entertaining. This story however, has no redeeming qualities, and is simply meant to present an entirely false and misleading picture of reality to bunch of proto-infants disguised as adults, that really should know better. But do not.

  2. makati1 on Wed, 19th Feb 2020 9:37 pm 

    RIGPORN. Another bullshit propaganda piece from the brainwashing USMSM. LMAO!

  3. makati1 on Wed, 19th Feb 2020 9:50 pm 

    Anon, you got it right. It proves that real education in the US is nonexistent. The ability to critically think is gone. Sigh!

  4. Abraham van Helsing on Thu, 20th Feb 2020 12:57 am 

    Peak-oil 2011, ASPO, Heinberg, Campbell… priceless!

  5. anon on Thu, 20th Feb 2020 3:47 am 

    another one who doesnt differentiate between ‘exports’ and ‘net exports’. Yes, there are cases where overland (rail or pipeline) transport is expensive enough that it’s cheaper to export the oil than it is to ship it domestically. The classic case was alaskan oil, much of which got shipped to asian markets as the us west coast couldnt buy it all. was cheaper to ship west african and venezuelan crude by sea to texas or the us east coast than ship alaskan oil to the other side of the continent (and the biggest crude carriers dont fit in the panama canal either) .. but anyone who claims that america is suddenly an energy exporter has failed to comprehend the meaning of ‘net exports’ .

  6. Richard Guenette on Thu, 20th Feb 2020 7:18 am 

    RIGZONE- a load of crap.

  7. cam on Thu, 20th Feb 2020 7:46 am 

    The real story is in the first line. Production 13 million barrels per day! Consumption 19-21 million barrels per day!
    Go figure!

  8. Dredd on Fri, 21st Feb 2020 2:43 pm 

    “US Oil Export Story Has Really Just Started”
    New baby bullshit eh?

    (Seaports With Sea Level Change – 7).

Leave a Reply

Your email address will not be published. Required fields are marked *