The USA is now an oil superpower, especially towards the EU
The results of the Russian-Ukrainian conflict and the "Fight against carbon" are interesting: as Greg Miller of FreightWaves reports, the American industrial complex has managed to oust and replace Russia as the main source of European energy, both crude oil and natural gas , and in the process push U.S. crude exports to record levels, led by a surge in European exports.
Indeed, as diplomats gather at the UN COP 28 summit on climate change, fossil fuel production and consumption are reaching new highs and tanker owners are uniquely positioned to profit from increased trade flows.
The Biden administration is a leading proponent of decarbonization, yet the United States is pumping record volumes of hydrocarbons . This year, America is on track to become the world's largest producer and exporter of natural gas, as well as the largest exporter of refined products and liquefied petroleum gas.
However, there are also great successes on the crude oil front – for energy producers and shipowners, not for supporters of decarbonisation.
The United States produced 13.2 million barrels per day (b/d) of crude oil in September, according to data released Thursday by the Energy Information Administration. This is the highest monthly production level ever.
And not only is America producing more crude, it is also exporting a larger share of the crude produced, further boosting volumes aboard tankers bound for Europe and Asia.
Crude oil exports by sea increased by 19% compared to 2022
US crude oil exports were banned between 1975 and 2015. For 40 years, US production could only be sold abroad if it was first refined and then exported as a petroleum product.
The end of the ban dramatically increased market opportunities for U.S. production, thus spurring more production and creating more business for oil companies and tanker owners.
This upward momentum continues. Seaborne crude exports are tracked by commodity information provider Kpler. In the January-November period, its data shows that U.S. seaborne crude exports averaged 4 million b/d, an all-time high and up 19% from a year earlier.
Exports averaged 4.45 million b/d in November, the second-highest monthly average on record, just shy of March's peak of 4.46 million b/d.
Strongly increasing volumes both towards Europe and Asia
The Panama Canal is wreaking havoc on many freight chains, but has virtually no effect on U.S. crude exports.
US crude oil exports to Asia are loaded onto very large cargo ships (VLCCs, tankers carrying 2 million barrels) through ship-to-ship transfers in the US Gulf. VLCCs are too large to transit the Panama or Suez Canals and use the Cape of Good Hope.
US exports to Europe are transported aboard Aframax (750,000 barrel capacity), Suezmax (1 million barrel capacity) and VLCC tankers.
After the invasion of Ukraine, Europe increased purchases of US crude to compensate for the reduction in Russian supply. According to Kpler data, an average of 1.83 million b/d of US crude flowed into Europe in the January-November period, an increase of 26% compared to the full-year 2022 average.
Europe's share of total U.S. crude exports rose to 46% this year compared to 37% in 2021, the year before the invasion, while Asia's share is 41%, down from 47% of 2021.
“In volumetric terms, the story has been all about Europe this year,” Reid I'Anson, senior commodities analyst at Kpler, told FreightWaves. “Europe continues to depend more and more on US energy, not only for LNG (liquefied natural gas) but for all sectors.”
Despite the lure of Europe, U.S. crude exports to Asia also continued to grow. Exports to Asia are hitting a record average of 1.65 million b/d, up 15% from last year and 26% from 2021, according to Kpler data.
The increase in volumes to Asia translates into a profitable business for VLCC owners. Brokerage True North Chartering counted 40 VLCC spot cargoes embarked in the US Gulf in both October and November, matching the previous monthly high in April.
In short, in the end there is a winner in the whole current war between Ukraine and Russia, and this is the USA, which now competes as an exporter of hydrocarbons
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The article The USA is now an oil superpower, especially towards the EU comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/usa-esportazioni-petrolio-record/ on Tue, 12 Dec 2023 06:40:40 +0000.