A cargo of 2 million barrels of U.S. crude oil arrived this month in Spain. It is, according to Bloomberg, the biggest U.S. oil cargo to arrive in Europe since at least 2016. But it may be only the beginning.
Bloomberg reported on the arrival of the supertanker this week, noting that normally, European buyers get their U.S. oil on smaller vessels. Yet this may be about to change as the EU, which covers most of Europe, increasingly shuns Russian oil and looks for alternatives.
Like LNG, U.S. oil makes the most sense from a political perspective: the U.S. and the EU have demonstrated a close partnership in their sanction action against Moscow, and the U.S. has signaled it would help the EU weather the boomerang effects of these sanctions.
Citing vessel-tracking data, Bloomberg reported that since the start of the year, four supertankers have traveled between the U.S. and Europe, compared with just one a year ago. The vessel that arrived in Spain this month, however, is the first to do so since the U.S. lifted its ban on oil exports seven years ago.
Meanwhile, the U.S. and the EU are privately discussing how the EU could approach its reduction of Russian oil imports, according to another Bloomberg report. In the event of such reduction through an oil embargo, which is being discussed in Europe right now, oil prices are going to rise further, and neither the U.S. nor the EU want higher prices.
This has made the issue sticky for the partners, with little chance of a quick or easy resolution of the problem. Yet, the U.S. will also be among those benefiting from an EU oil embargo by raising its oil exports to the EU.
Meanwhile, U.S. crude oil and product exports hit an all-time high earlier this month, reaching 10.6 million bpd as buyers seek alternatives to Russian oil and derivatives.
By Irina Slav for Oilprice.com
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