US Gulf Coast Crude Exports Are Breaking Records
OSLO, Norway — U.S. oil exports from Gulf Coast refineries are poised to reach an all-time high of 3.3 million barrels per day as the second quarter of the year comes to a close, according to a new analysis by Rystad Energy.
Artem Abramov, head of shale research at the Norwegian firm, said unprecedented government support for the domestic crude oil industry during the COVID-19 crisis, including releases of oil from the Strategic Petroleum Reserve, helped dramatically increase exports of domestic crude even as refining capacity remained depressed compared with pre-pandemic levels.
On the plus side, the government intervention has enabled the U.S. to support global markets “amid the most challenging energy crisis in at least 30 years,” Abramov said.
The unintended consequence of intervention is that more barrels than ever before are being sold to international buyers.
As the Biden administration continues to explore ways to rein in gasoline prices for U.S. consumers, it is reportedly considering a full or partial ban on crude exports.
The going has been slow, however, as the administration has been getting an earful from industry leaders and others who argue that decision wouldn’t necessarily lead to a dramatic cut in prices at the pump and could hurt key allies.
The government’s unprecedented support for the domestic crude system has accelerated U.S. supply, with crude exports through Gulf Coast ports expected to top 3.3 million barrels per day in the second quarter this year, exceeding the previous record of 3.2 million barrels per day in the first quarter of 2020, before the COVID-19 pandemic took its toll on global markets.
The Port of Corpus Christi is a significant driver of the growth, with throughput increasing by more than 150,000 barrels per day to reach 1.86 million barrels per day, up from a total 1.7 million in the first quarter of 2022, far surpassing pre-COVID levels.
Port of Houston exports have also been rising since the third quarter of last year, but still fall short of their pre-pandemic levels.
According to the report, the current growth trend was established in late 2021 following a domestic supply recovery and support given to domestic consumption from a moderate Strategic Petroleum Reserve release.
Under Rystad Energy’s best case scenario, crude exports will approach 4 million barrels per day in the first three months of 2023 and break the 4 million barrels per day barrier by the second quarter of 2023, thanks to strong Strategic Petroleum Reserve draws and a rosy domestic supply outlook.
More than 95% of all US crude exports transit through the Gulf ports of Corpus Christi, Houston, Beaumont, Port Arthur and Louisiana.
The Well News reached out to the White House for comment.
Dan can be reached at [email protected] and at https://twitter.com/DanMcCue.
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