The US Oil Export Boom Is Only Just Getting Started

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U.S. crude oil exports jumped by nearly 1 million bpd in the first half of 2019 from the same period in 2018 to average 2.9 million bpd between January and June this year, the Energy Information Administration (EIA) said on Thursday.

Average U.S. exports of crude oil rose by 966,000 bpd in the first half of 2019, compared to the first half of 2018. In June this year, the U.S. set a monthly average record of 3.2 million bpd of crude oil exports, EIA data showed.

Canada stayed the top foreign destination of U.S. crude oil, with U.S. exports rising by 3 percent year on year in H1 2019.

U.S. exports to Asia and Oceania jumped by 58 percent, with exports to South Korea, India, and Taiwan more than doubling.

A notable exception from the rising trend of U.S. crude sales in Asia was China— U.S. crude oil exports to China averaged 248,000 bpd in the first half of 2019, down by 64 percent from the same period last year, as Chinese buyers have been reluctant to buy U.S. crude oil amid the U.S.-China trade war, fearing that tariffs may come any moment, disrupting their plans and making the imported oil more expensive.

U.S. crude oil exports to Western Europe surged by 66 percent to average 824,000 bpd in the first half of 2019, EIA data showed.

Despite soaring crude oil exports, the United States is still one of the world’s biggest crude oil importers, EIA noted. U.S. net crude oil imports—that is imports less exports—averaged 4.2 million bpd in the first half this year, down by 6.1 million bpd for the first half of 2018, thanks to rising U.S. domestic crude oil production. Related: Is Libya’s Oil Output Set For A Steep Drop?

The United States briefly overtook Saudi Arabia as the world’s number one gross oil exporter at one point in June this year, the International Energy Agency (IEA) said last month.  

“A reminder to the producers that competition for market share is getting tougher comes from preliminary data showing that in June the US momentarily overtook Saudi Arabia and Russia as the world’s number one gross oil exporter,” the IEA said.

Although U.S. shale growth has hit a wall in recent months, production from the United States continues to grow year on year, adding to the current surplus on the market.

Even at a lower production growth pace, U.S. oil exports are expected to increase in the near future, because of reduced takeaway constraints from the Permian to the U.S. Gulf Coast, EIA said in its Short-Term Energy Outlook (STEO) for September. The Cactus II crude oil pipeline added an estimated 670,000 bpd capacity and the EPIC Midstream contributed another 400,000 bpd to takeaway capacity out of the Permian.  

By Tsvetana Paraskova for Oilprice.com