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Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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U.S. Oil Is Replacing Russian Crude In EU Markets

  • The amount of U.S. crude oil being exported to Europe has increased significantly in recent months.
  • Russian crude oil exports to the EU, likewise, fell to 1.4 million bpd in November 2022.
  • This shifting crude oil landscape will reinforce the WTI’s place as part of the Brent forward contract.
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As the EU contends with the lack of Russian crude oil as a result of its restrictions on crude oil imports and the G7's price ceiling on Russian crude oil, the amount of U.S. crude oil being exported to Europe has increased significantly in recent months. 

And it is expected to stay high. 

Lucky for Europe, any decreases in the amount of Russian crude oil shipped into the EU is likely to be largely offset by the increase in the volume of American crude oil. In 2022 alone, total U.S. oil shipments to Europe increased by around 70% above 2021 levels, CME Group said, ultimately reaching 1.75 million barrels per day.

Russian crude oil exports to the EU, likewise, fell to 1.4 million bpd in November 2022.

This shifting crude oil landscape will reinforce the WTI’s place as part of the Brent forward contract. As of June of this year, WTI will be used as one of the crude streams in the Dated Brent pricing mechanism, according to CME, as the volumes that make up BFOET crude oil in the North Sea market change as production continues to fall. 

For perspective, the CME Group reports that “the total volume of U.S. crude exported to Europe in October 2022 was around 865,000 barrels per day more than the volume loaded at the existing North Sea crude terminals for the grades that underpin the Brent contract.”

Trading in WTI-linked futures is picking up steam ahead of the June 2023 date, with some WTI Midland contracts trading as far ahead as December 2026. As of December last year, open interest throughout WTI Midland and WTI Houston had increased by 60,000 lots to 300,000 contracts, CME said.

By Julianne Geiger for Oilprice.com

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Leave a comment
  • Francisco Napoleao on February 03 2023 said:
    The thing is the russian crude oil blend Urals is being sold much cheaper elsewhere. Meaning someone is paying more than the true market price should be and other are buying much cheaper. The EU is paying a huge price for its commitments that are ecologically also very questionable. The US producer would be dumb if they increase production much more, since the EU's purchases will diminish with time considerably. So if more US oil is coming to the EU where are they losing the market? In India, in Southeast Asia, in China and even possibly in South America. Competitiveness in the EU keeps worsening.... That is the big news...

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