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US refiners remain exposed to attack on Saudi crude oil despite lower imports

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US refiners remain exposed to attack on Saudi crude oil despite lower imports

While the loss of approximately half of Saudi Arabian crude oil production following attacks on Saudi Arabian Oil Co.'s Abqaiq facility on Sept. 14 could pose a financial challenge for U.S. refiners, the supply disruption may pose less of an operational challenge than those from sanctions on Venezuela and OPEC production cuts.

Middle Eastern oil accounts for approximately one out of every five barrels of U.S. crude oil imports. But in a Sept. 15 report, Goldman Sachs analysts noted U.S. refiners have become less dependent on crude oil imports from Saudi Arabia, particularly lighter grades, due to U.S. shale oil production growth.

Saudi crude oil exports to the U.S. have fallen from an average of 1.2 million barrels per day, or 15.8% of U.S. crude oil imports, in 2014 to 563,319 bbl/d, or 8.1% of total imports during the first six months of 2019.

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Saudi crude oil accounted for more than one in four barrels of the 1.8 million bbl/d of light crude oil imported into the U.S., but only 2.9% of the 5.2 million bbl/d of the imported medium and heavy crude oil grades imported over the same period.

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Year to date through June 30, four companies imported more than 100,000 bbl/d of Saudi crude oil, but those four companies have varying exposure to the loss of Saudi oil supplies. Chevron Corp.'s average imports of 193,243 bbl/d of Saudi crude was enough to supply more than one in five barrels of its U.S. crude oil refining capacity. While Marathon Petroleum Corp. imported the second largest volume of crude oil, that amount reflected a relatively small proportion of the company's overall refining capacity.

In contrast with its peers, PBF Energy Inc. has ramped up its imports of Saudi crude. Year-to-date through June 30, it imported 102,481 bbl/d, up from 98,644 bbl/d during all of 2018, and more than double the 49,449 bbl/d it imported in 2015.

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