The world’s largest oil consumer, the U.S., also exported more hydrocarbons than ever before in 2017 and shows no signs of slowing down.
You name it — crude oil, gasoline, diesel, propane and even liquefied natural gas — all were shipped abroad at a record pace. While the surge comes many years after the shale boom started, it can be traced straight back to the growth of horizontal drilling and fracking.
U.S. exports are poised to expand even further, as the fear of peak oil supply has all but vanished just as a new demand threat emerges in the form of electric vehicles.
Americans are expected to end the year pumping oil out of the ground at rates unseen since the early 1970s. More and more of it is going overseas, giving OPEC a headache as the group restrains its own output.
Last year, the U.S. tested the export waters after a nearly four-decade-old ban was removed. But this year, purchases of U.S. light, sweet crude have skyrocketed as pipeline and dock infrastructure was built out and the wider price spread between Brent and West Texas Intermediate crude coaxed more cargo abroad.
Weekly preliminary government data show total gasoline exports hit a record 1.21 million barrels a day in November.
Canada, once the only regular buyer of U.S. crude, finds itself competing with refiners in Europe and Asia. In April, China bought more than Canada did for the first time.
“It’s pretty amazing, really,” said Matt Smith, ClipperData’s director of commodity research. “You learn to never say never in this market.”
Of all the emerging trade flows this year, crude deliveries into Europe and Asia are most surprising, Smith said. And if the price of European oil stays suspended into the New Year — a good possibility after the Forties oil pipeline was shut recently to repair a crack — U.S. exports will continue to hold above 1 million barrels a day.
The growth of U.S. gasoline and diesel exports was more subtle this year, mostly filling the gaps left as refiners in Latin America weren’t up to the task of meeting the region’s growing thirst for fuel.
Refiners in the middle of the U.S. were pumping out fuel at a record pace, leaving a surplus of refined products along the Gulf Coast ready to be shipped to eager Latin American buyers, said Mason Hamilton, an analyst with the U.S. Energy Information Administration.
“The Midwest is running at bonkers levels,” Hamilton said.
Blewitt writes for Bloomberg.