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Oil Jumps On Hefty Crude Draw

Oil Jumps On Hefty Crude Draw

Oil prices rocketed on Wednesday…

WTI Tops $60 On Gulf Of Mexico Shut-Ins

WTI Tops $60 On Gulf Of Mexico Shut-Ins

Oil prices ended the week…

U.S. Debuts VLCC Exports From Louisiana Offshore Oil Port

Shell

The continental United States’ first very large crude carrier (VLCC) export shipment will contain crude from Shell sailing from the Louisiana Offshore Oil Port (LOOP), market sources told S&P Global Platts.

U.S. Debuts VLCC Exports From Louisiana Offshore Oil Port

The tanker, named Shaden, will carry medium sour crude loaded by a bidirectional pipeline at an offshore mooring station. Shaden flies the Saudi Arabian flag and is owned by Bahri – the world’s largest VLCC owner.

Shell and LOOP have not commented on the grade that Shaden will be carrying, but market sources suggested it would either be Mars or LOOP Sour.

"Shell is a big seller of Mars, but a buyer of domestic sours, such as LOOP Sour," a trader said late Monday.

Shaden arrived at LOOP from a Galveston port on Sunday, after completing the voyage from the Ras Tanura port in Saudi Arabia.

LOOP was inaugurated back in 1981 and has remained the U.S.’ only offshore deepwater oil port. It’s the only facility that can offload VLCCs and ULCCs and other huge tankers. Its located near both Louisiana and Texas—two states that exported 891,000 barrels per day of oil in 2017.

Related: Is This The Beginning Of A Downturn In Oil?

Energy independents such as Cheniere, Occidental Petroleum, and refiner Phillips 66 are building capacity for larger tankers along the Texas coast, and Occidental even tested a VLCC at its Corpus Christi facility earlier this year. Yet on the whole, the usual way to load VLCCs in the Gulf is to first load the crude onto smaller vessels and then transfer it to the supertanker in deeper waters.

This is where LOOP’s main advantage over the other ports lies: there is no need for the transfer, which increases costs and potentially, the risk of a spill. This is an important advantage as U.S. crude struggles to compete with lower-cost producers such as those in the Middle East.

By Zainab Calcuttawala for Oilprice.com

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