Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Oil | Shipping

US crude exports, Permian production expected to fall: Port of Corpus Christi CEO

Oil | Crude Oil | Shipping | Storage | Tankers

'Cheap oil' takes VLCC freight for a bull ride on floating storage play

Shipping | Marine Fuels

Platts Bunkerworld

Capital Markets | Commodities | Oil | Crude Oil | Refined Products | Fuel Oil | Gasoline | Jet Fuel | Naphtha | Marine Fuels | Equities | Financial Services | Banking | Non-banks | Private Markets

North American Crude Oil Summit, 3rd annual

Natural Gas | Oil | Crude Oil

Norway considers oil output cut as OPEC+ talks hang in the balance

US crude exports, Permian production expected to fall: Port of Corpus Christi CEO

Highlights

Corpus crude exports fall in February and March

Port of Corpus Christi may cut 2020 capex by one-third

Houston — US crude exports and Permian Basin production may soon see notable declines as the plunge in oil prices triggers a painful but possibly short-lived downturn, said Port of Corpus Christi CEO Sean Strawbridge Wednesday.

Not registered?

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

Register Now

Crude exports from Corpus Christi already started to dip in February from record highs in January as impacts from the coronavirus took hold, but larger declines are expected in the weeks and months ahead now that Saudi Arabia and Russia are preparing to flood the market in a price war that's sent oil prices down into the $30/b area, Strawbridge said in an interview.

"It is fully expected you'll see a significant decrease in demand and, therefore, a significant decrease - or a decrease I should say - in US exports of crude oil," he said. "The question is how much of a decrease?

"The investment banker in me says they can always go to zero. Is that realistic? No.," he added. "So the question is where do we think we'll settle in at?"

But he's not ready to make specific predictions just yet, noting that it's still far too early to tell.

Now the country's largest exporter of oil after surpassing the Houston Ship Channel last year, Corpus Christi peaked at a daily high of 1.8 million barrels in January, although the monthly average was 1.4 million b/d. Strawbridge said it's closer to 1.3 million b/d in March thus far and likely to fall more.

"Given that the downturn is still relatively fresh, we haven't seen any significant downturn at this point," he said.

Overall US crude exports fell to 3.41 million b/d for the week that ended March 6, the U.S. Energy Information Administration said Wednesday, down from 4.15 million b/d the prior week. Total US crude production dipped from an estimated 13.1 million b/d down to 13.0 million b/d.

Only a small handful of companies can make money with oil priced below $35/b, so pipeline volumes will decline and Permian crude production could fall below 4 million b/d, he said, which would be well down from the federal government's latest estimate of about 4.8 million b/d.

"We fully expect there is going to be a consolidation and shake out with perhaps a bit of bankruptcies going on," Strawbridge said.

His expectation though is that neither the Saudis nor Russians want a prolonged fight. While 2020 is looking particularly painful for producers, Strawbridge said he remains bullish for 2021 and beyond.

GROWTH STILL NEEDED

"The further the pendulum swings one way and the faster it swings, the faster the pendulum swings back toward equilibrium," he said. "It would not surprise me if we eventually saw a pretty significant bounce. The question is when would we see that bounce? And who can weather the storm until we see that bounce?"

That means construction still needs to continue on dredging, storage and terminal projects at the port, he said, citing ongoing growth with Buckeye Partners' South Texas Gateway Terminal and Moda Midstream's expanded Ingleside Energy Center. But some other projects may be delayed.

The Port of Corpus Christi may cut is 2020 capital budget from $300 million to $200 million, he said, deferring the rest of the spending to 2021.

And Strawbridge praised the recent decision by Trafigura to join competitor Phillips 66 on its Bluewater offshore crude export terminal project. The Bluewater project would allow VLCCs to fully load offshore of Corpus Christi without requiring any lightering.

Although nearly 10 offshore crude export projects were initially proposed in the Gulf of Mexico, Strawbridge only sees a couple of them coming to fruition - Bluewater and the SPOT terminal offshore of Houston that's led by Enterprise Products Partners and Enbridge.

"There's still a strong need to fully load VLCCs, and there's a limited capability for that," he said.