• 3 minutes Biden Seeks $2 Trillion Clean Energy And Infrastructure Spending Boost
  • 5 minutes While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 8 minutes Gazprom fails to exempt Nord Stream-2 from EU market rules
  • 7 mins Trumpist lies about coronavirus too bad for Facebook - BANNED!
  • 43 mins The World is Facing a Solar Panel Waste Problem
  • 9 hours Rational analysis of CV19 from Harvard Medical School
  • 9 hours Biden admits he has been tested for Cognitive Decline several times. Didn't show any proof of test results.
  • 4 hours The Core Issue Of US Chaos..Finally disclosed
  • 10 hours Trump Suggests Delaying Election Amid Fraud Claims
  • 8 hours Open letter from Politico about US-russian relations
  • 9 hours China's impending economic meltdown
  • 9 hours Why Oil could hit $100
  • 9 hours Brent above $45. Holding breath for $50??
  • 4 hours Pompeo upsets China; oil & gas prices to fall
  • 8 hours Russia Trying To Steal COVID-19 Vaccine Data, Say UK, U.S. and Canada
  • 1 day End Game For Oil? OPEC Prepares For An Age Of Dwindling Demand
Leaked: China Quietly Helped Saudi Arabia Build A Secret Nuclear Site

Leaked: China Quietly Helped Saudi Arabia Build A Secret Nuclear Site

Saudi Arabia has constructed with Chinese…

COVID Fears Drive Oil Prices Downwards

COVID Fears Drive Oil Prices Downwards

Despite significant oil inventory declines…

Demand For Offshore Oil Rigs To Return In 2022

Demand For Offshore Oil Rigs To Return In 2022

Demand for offshore rigs will…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Booming U.S. Oil Exports Could Hit A Bottleneck

U.S. crude oil exports have been setting new records lately, but as both the U.S. oil production and exports are set to increase, analysts and traders warn that booming exports may reach infrastructure limitations in two to three years, which would weigh on U.S. oil prices due to high domestic production with constrains in takeaway capacity.

U.S. crude oil exports hit a record-high of 1.98 million bpd in the week to September 29, according to EIA data. This was the highest weekly average since the U.S. removed restrictions on crude oil exports at the end of 2015, after a four-decade ban. For the week to October 20, the latest available weekly EIA data, U.S. crude oil exports averaged 1.924 million bpd.

Oversupply due to Harvey prompted the higher exports, which created a wide spread of around $6 between WTI and Brent prices, causing buyers to show preference for the cheaper U.S. crude grade. The spread is wide enough to offset shipping costs to destinations like Asia and Europe.

“Get to a $4 spread and you can take it anywhere in the world,” R.T. Dukes of Wood Mackenzie told The Wall Street Journal last month.

According to analysts surveyed by Reuters, U.S. crude oil exports could start hitting infrastructure bottlenecks such as shipping traffic, dock space, and pipelines to ports, if American exports increase to 3.5 million bpd or 4 million bpd. Related: How Many Barrels Of Oil Are Needed To Mine One Bitcoin?

“Two to three years down the road, if U.S. production continues to grow like current levels, the market will eventually signal that more infrastructure is needed. But I don’t think a lot of those plans are in place right now,” Michael Cohen, head of energy markets research at Barclays, told Reuters.

According to Carlin Conner, chief executive at SemGroup, the owner of the Houston Fuel Oil Terminal:

“There aren’t very many terminals with the needed pipeline capabilities, tank farm capacity and proper docks to load the ships…. Adding this is expensive and not done easily. So there are limitations to unfettered export access,” Conner tells Reuters.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • rjs on October 30 2017 said:
    with total US crude production currently at 9.5 million barrels a day, if we export 3.5 million barrels a day, that leaves 6 million barrels a day for our own use....now, US refineries are typically using 16 to 17 million barrels per day of crude, so with 3.5 million barrels going to exports, we'll have to import north of 10 million barrels per day to meet our needs...

    now, here's the kicker...exports from the US are being sold benchmarked to the price of WTI, right now around $54 a barrel...but what we import is benchmarked to Brent at $60.50, or to the OPEC basket price, which closed last week at $57.54...so every barrel crude that we export ends up being replaced by more expensive foreign oil...where is the wisdom in that?

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News