In this list
Oil | Shipping

US crude exports may hit 4 million b/d amid Saudi outage

Energy | Electric Power | LNG | Natural Gas | Natural Gas (North American) | Oil | Refined Products | Metals | Shipping | Tankers

Market Movers Americas, Jan. 30-Feb. 3: Natural gas, tankers continue bearish; Americas markets look toward sanctions

Energy | Oil | Crude Oil

Platts Crude Oil Marketwire

Energy | Oil | Energy Transition

APPEC 2023

Agriculture | Shipping | Grains

Black Sea Watch: Grain flows ease on month as inspection delays remain unresolved

Petrochemicals | Metals | Shipping | Polymers | Non-Ferrous | Containers

The party's over: Interest rates, inflation, oversupply siphon COVID-fueled polymer demand

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

US crude exports may hit 4 million b/d amid Saudi outage

Highlights

Analysts sees USGC able to handle 4 million b/d in exports

Permian pipeline space to grow to 5.2 million b/d by mid-2020

New deepwater export terminals not expected before 2021

  • Author
  • Meghan Gordon
  • Editor
  • Jim Levesque
  • Commodity
  • Oil Shipping

Washington — US crude exports could test new highs and potentially hit 4 million b/d for the first time by the end of the year as a result of higher demand from a possible prolonged Saudi disruption, analysts said this week.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The US Gulf Coast tanker market was showing higher interest in fixings this week, although US exports dipped to 2.98 million b/d last week after remaining above 3 million b/d for four straight weeks, Energy Information Administration data showed Wednesday.

"It's not going to get fixed overnight; it's going to take some time, and that will keep the market tight," Sandy Fielden, Morningstar's oil research director, said of the Saudi disruption. "And, therefore, the market call on the US will increase because the US is effectively the marginal supplier."

US crude exports averaged 2.9 million b/d in the first half of 2019, compared with 1.8 million b/d in H1 2018.

The US Gulf Coast can handle additional export volumes thanks to major new Permian pipelines in operation: the 600,000 b/d Epic and 700,000 b/d Cactus II, to be followed soon by the 900,000 b/d Gray Oak pipeline.

Click here for full-size image

S&P Global Platts Analytics expects Permian-to-Gulf pipeline capacity to increase by 2.4 million b/d between mid-2019 and mid-2020 to 5.2 million b/d.

Fielden believes existing Gulf Coast capacity can handle 4 million b/d in exports, but getting to 4.5 million b/d or 5 million b/d could prove to be more difficult. He pointed to concerns about vessel traffic in Corpus Christi and the vulnerability of the Houston Ship Channel to storms or protests, such as Greenpeace's September 12 blockade.

"It's certainly not problem-free," he said.

DEEPWATER PORT PROJECTS

Sergio Baron, senior crude analysts for Platts Analytics, said the impact of the Saudi disruption on US crude exports will all depend on duration.

"Every new molecule produced in the USA is headed to the export market, and that rate is 100,000 b/d per month, give or take," he said.

The next major expansion in US export capacity is more than a year away, as eight projects compete to build deepwater oil export terminals capable of fully loading VLCC supertankers. They estimate starting service in 2021 or 2022, although not all are expected to get built.

Five of the projects have filed federal applications: Trafigura's Texas Gulf Terminal and Phillips 66's Bluewater Texas Terminal off Corpus Christi; Enterprise's Sea Port Oil Terminal off Houston; and Enbridge's Texas COLT and Sentinel Midstream's Texas GulfLink off Freeport.

The Louisiana Offshore Oil Port is the only Gulf of Mexico port able to fully load VLCCs without lightering from smaller vessels. It started exporting crude in February 2018.

-- Meghan Gordon, meghan.gordon@spglobal.com

-- Edited by Jim Levesque, newsdesk@spglobal.com