The United States nearly achieved net crude exporter status last week for the first time since World War Two, according to U.S. government data released Wednesday. Net imports of crude oil narrowed to 66,000 barrels per day, the lowest on record in weekly data that goes back to 2001, while exports climbed to 5.2 million bpd, the highest in seven months. On an annual basis, the U.S. was last a net exporter of crude in 1943, as reported by The Hindu BusinessLine. The latest data shows U.S. oil product exports just hit an all-time record, with the world needing not just American crude but American refineries as well, according to market reports.
The U.S. and Israel's war with Iran triggered the largest ever disruption to the global energy market, with Iranian threats to shipping stopping around a fifth of the world's oil and gas supplies from transiting the Strait of Hormuz waterway. According to The Hindu BusinessLine, refiners in Asia and Europe that depend on those supplies have bought alternative cargoes from wherever they can, sharply boosting demand for oil from the U.S., the world's largest producer. The disruption to Middle East supplies has blown out the premium for Brent crude futures over U.S. West Texas Intermediate crude futures to as much as $20.69 a barrel last month.
About 2.4 million bpd, or 47% of U.S. exports last week sailed toward Europe, while 1.49 million bpd, or 37%, headed to Asia, up from 30% a year ago, according to ship tracking service Kpler. Top buyers included the Netherlands, Japan, France, Germany and South Korea. As reported by The Hindu BusinessLine, a vessel carrying 500,000 barrels of crude signaled it was en route to Turkey, which would mark the first U.S. export to the country in at least a year. The price of physical crude oil cargoes for prompt delivery to Europe hit a record high near $150 a barrel on Monday, while those for Africa hit new peaks, according to LSEG data and traders.
U.S. exports are likely to touch about 5.2 million bpd for April, with exports pushing up against capacity limits on a monthly basis, according to Kpler analyst Matt Smith. The U.S. can export as much as 6 million bpd, but its exports hit a record high of 5.6 million bpd in 2023, with limited pipeline capacity and vessel availability constraining further growth. As reported by The Hindu BusinessLine, Dubai-based oil trader Bekzod Zukhritdinov noted that 'the market is already testing the export ceiling with 5.2 million bpd exported last week. Every incremental barrel from here costs more in freight and logistics than the last one.'
The U.S. is rapidly approaching its export capacity limits, with about 80 empty supertankers heading to the Gulf of Mexico as of Wednesday, likely to pick up crude over April and May, according to Vortexa senior analyst Rohit Rathod. A release of medium sour crude from the Strategic Petroleum Reserve could push more light, low sulfur U.S. crude grades out for export, but a shortage of tankers and higher freight rates could hurt that export demand. Treasury Secretary Scott Bessent has issued warnings to oil and gas companies about price transparency, stating that 'Treasury will be keeping retail gas stations HONEST. You did this on the way up, better be doing this on the way down!'
