US crude oil and refined product exports have been growing and the United States is now a consistent net-exporter of refined products. Looking forward, Latin America and South America provide a significant growth opportunity for Gulf Coast refiners. When it comes to crude oil exports, while Stratas Advisors expects growth to continue, market opportunities are more constrained.
In the first quarter of 2019, the US imported an average of 6.98 mmb/d of crude oil, with the largest volumes coming from Canada (3.8 mmb/d), Saudi Arabia (643 mb/d), and Mexico (624 mb/d). In the same quarter, the US exported an average of 2.75 mmb/d with the majority of volumes going to Canada (466 mb/d), Korea (357 mb/d), and Netherlands (304 mb/d). Almost all of US crude shipments destination grew this year first quarter opposed to last year first quarter; the fall recorded in China, primarily impacted by trade tariffs, where previous year first quarter averaged of 358 mb/d has fallen to 124 mb/d in the first quarter of this year. Buyers of US crude exports appear to have made the most of WTI’s global differential. First-quarter 2019 crude exports were 1.5 mmb/d higher than exports in 1Q18. The first quarter 2019 Brent-WTI differential averaged approximately $8.91/bbl versus $4.31/bbl in the first quarter of 2018.
Exports from the Gulf Coast have accounted for the bulk of growth as refiners take advantage of high volumes of domestic crude. Refineries in the Gulf Coast are some of the most advanced in the world and are equipped to process very high volumes of crude effectively. The Gulf Coast has 56 operating refineries with aggregate crude oil distillation capacity of 10.5 mmb/d and an average utilization of 92.3%
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