AAPG’s Well Read
editor Shangyou Nie, recently posted about increasing U.S. exports of crude
oil, petroleum products, and LNG in light of the disruptions to Middle East
output due to the Iran situation. U.S. exports have increased dramatically. He
summarizes the situation below:
“The Energy Information Administration reported that the
total U.S. crude and petroleum product exports reached a record 12.9 million
barrels per day during the week of 17 April. The United States is already the
world’s largest LNG exporter. With the ongoing war in Iran, U.S. oil and gas
supply has become more important to Europe and Asia.”
“The average weekly export of U.S. crude and petroleum
products jumped from 10.6 million barrels per day during the first week of
March to 12.9 million barrels per day by mid-April.”
That represents an increase of
nearly 22%, which is quite a lot in the period of just over a month. U.S. crude
oil and petroleum products exports began to increase in 2008 and have steadily
increased since then, first reaching 10 million barrels per day in 2022. The
latest EIA data has crude exports at 4.8 million barrels per day and petroleum
product exports at 8.1 million barrels per day.
He notes that the increase in U.S.
exports has been driven by two factors: 1) an increase in U.S. oil output, and
2) the availability of Venezuelan crude to U.S. refineries since the beginning
of the year.
He also notes that Japan has
likely been the most impacted country, with 90% of its crude oil imports coming
from the Middle East through the Strait of Hormuz. Japan is already one of the
largest buyers of U.S. LNG and desires to buy more. U.S. LNG exports continue
to increase and pass new milestones, with more export facilities in the works
for the future. U.S. LNG exports are now up to 15 BCF/day and are expected to
grow to 18 BCF/day in 2028. He notes that despite these expected export
increases, domestic prices for natural gas are not expected to grow very much,
with only marginal growth expected.
With European
sanctions on Russian pipelined gas, imports of U.S. LNG are expected to grow
and remain robust. Since the advent of the Russian invasion of Ukraine in 2022,
Europe has been buying the bulk of U.S. LNG and that remains the case, with
Europe currently purchasing two-thirds of U.S. LNG. Demand for LNG in Asia also
remains high, especially with Middle East supplies disrupted.
References:
U.S.
Oil and Petroleum Product Exports Reach Record as the War in Iran Continues.
AAPG. Well Read. Shangyou Nie.
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