• 4 minutes USGS Announces Largest Continuous Oil Assessment in Texas and New Mexico
  • 10 minutes IT IS FINISHED. OPEC Victorious
  • 16 minutes GOODBYE FOREIGN OIL DEPENDENCE!!
  • 46 mins Paris Is Burning Over Climate Change Taxes -- Is America Next?
  • 22 hours The Great Climate Change Swindle
  • 2 hours End of EV Subsidies?
  • 29 mins Maersk's COO statment.
  • 2 hours Price Decline in Chinese Solar Panels
  • 32 mins Trump accuses Google Of Hiding 'Fair Media' Coverage of him
  • 2 days S. Australia showing the way
  • 1 day More OPEC Members May Leave
  • 23 hours China Builds LNG Icebreaker
  • 3 hours EPA To Roll Back Carbon Rule On New Coal Plants
  • 1 day Exxon buys green power.
  • 2 days I Believe I Can Fly: Proposed U.S. Space Force Budget Could Be Less Than $5 Billion
  • 2 days Qatar Leaving what is the effect on prices
Alt Text

Shell: EV Demand To Grow Regardless Of Oil Prices

Shell appears to believe that…

Alt Text

Falling Rig Count Can’t Halt Oil Price Slide

Oil prices continued to fall…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

More Info

Trending Discussions

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:




Back to homepage

Trending Discussions


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
-->