• 3 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 7 minutes Saudi and UAE pressure to get US support for Oil quotas is reportedly on..
  • 11 minutes China devalues currency to lower prices to address new tariffs. But doesn't help. Here is why. . . .
  • 15 minutes What is your current outlook as a day trader for WTI
  • 14 hours In The Bright Of New Administration Rules: Immigrants as Economic Contributors
  • 8 hours Will Uncle Sam Step Up and Cut Production
  • 1 day Movie Script: Epstein Guards Suspected Of Falsifying Logs
  • 9 hours Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 12 hours Continental Resource's Hamm (Trump Buddy) wants shale to cut production.Can't compete with peers. Stock will drop in half again.
  • 1 hour Domino Effect: Rashida Tlaib Rejects Israel's Offer For 'Humanitarian' Visit To West Bank
  • 1 day Significant: Boeing Delays Delivery Of Ultra-Long-Range Version Of 777X
  • 49 mins Gretta Thunbergs zero carbon voyage carbon foot print of carbon fibre manufacture
  • 5 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 2 days Kremlin Says WTO's Existence Would Be In Doubt If the U.S., Others Left
  • 2 days I think I might be wrong about a 2020 shakeout
  • 2 days China Continued Iran Oil Imports In July In Teeth of U.S. Sanctions
  • 2 days Strait Of Hormuz As a Breakpoint: Germany Not Taking Part In U.S. Naval Mission
Alt Text

Oil Prices Crash On Recession Fears

Oil prices fell sharply on…

Alt Text

Heat Wave Pushes Texas Power Demand To Record-High

Unusually high temperatures caused a…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Shale Boom Could Create A Refining Bottleneck

The growth in U.S. shale oil production is threatening to create bottlenecks in refineries, new research from Wood Mackenzie has revealed. The research suggests the United States needs new refining capacity to absorb all the additional production that is coming on stream in the shale patch.

Over the next five years, Wood Mac expects U.S. shale producers to add some 4 million bpd to their daily production. However, current refining capacity could only absorb between 900,000 and 1 million bpd. This means that the bulk of the additional production will have to go abroad, competing with Middle Eastern and African crude.

It’s not only a question of physical capacity, either. The increase in crude oil production will be accounted for by light and extra light crude, or condensate. But Gulf Coast refineries are equipped to process the heavier grades. Wood Mac’s researchers note that refiners in the U.S. have not rushed to add light crude processing capacity because the forecasts show that demand for gasoline may start to decline soon.

Wood Mac itself has given producers another cause for reluctance in building additional capacity: according to the researchers, shale oil production will peak in the mid-2020s.

There are foreign refineries ready to absorb some of the extra production, the research firm said. Until about 2022, European refiners will be the primary buyers of U.S. light crude. After that, more U.S. crude will go to Asia. Related: China Is Single-Handedly Solving The Gas Glut

Unsurprisingly, a lot of the additional crude to be produced in the shale patch—around 50 percent—will come from the Permian, at a rate of 1.9 million additional barrels daily. Most of this, Wood Mac’s senior analyst John Coleman says, will be shipped to the Corpus Christi export terminal.

Yet there is also a shortage of terminal capacity looming over local producers. The only port capable of handling Very Large Crude Carriers at the moment is the Louisiana Offshore Oil Port. The Corpus Christi port has yet to be expanded in order to be able to handle VLCCs.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play