US oil exports rise slowly as output, global demand tilts By Reuters

By Arathy Somasekhar

HOUSTON (Reuters) – Oil export gains are expected to level off in 2024 after years of strong growth, with domestic output expected to rise by the smallest amount since the pandemic, at a time when global oil demand remains sluggish .

Crude exports from U.S. ports have averaged about 4.2 million barrels a day this year, according to U.S. government data. That was up 3.5 percent from a year earlier, or the smallest percentage increase since 2015, when the U.S. exported its first cargo of domestic crude after ending a 40-year federal ban on domestic crude exports.

Last year, exports increased by 13.5%. They have risen every year except 2021, when COVID-19 crushed global oil demand.

“U.S. crude oil exports are flat due to a combination of slowing supply growth and reduced demand — particularly from Asia this year,” said Matt Smith, an analyst at energy data firm Kpler.

U.S. oil production is set to rise just 2.3 percent this year as shale producers remain focused on shareholder returns and limit new production spending.

Offshore production is expected to increase this year for new start-up projects such as Chevron Anchor (NYSE: ) in the Gulf of Mexico. But production is expected to grow slowly for several years, meaning exports this year will not benefit.

Global oil demand has slowed this year, particularly in China, where a prolonged property slump has exacerbated economic concerns. Average daily US crude oil exports to China have fallen by more than a third so far this year, Kpler data show.

The recent expansion of Canada’s Trans Mountain pipeline has also boosted China’s crude oil imports directly from that country’s west coast. Previously, Canadian crude was transported to the US Gulf Coast and exported from there to China.

US export volumes to Singapore also fell, while those to India and South Korea rose.

“Demand from Asia has not materialized,” said Rohit Rathod, market analyst at energy researcher Vortexa.

Average daily U.S. exports to Europe also fell about 1 percent so far this year from last year as European buyers snapped up cheaper regional and West African oil.

The only major new market for US crude was Africa as Nigeria’s Dangote refinery pumped barrels of WTI Midland crude after starting this year.

“Dangote is an outlier when it comes to new refining capacity because it runs predominately on light sweet crude — from Nigeria or the US,” Smith Kpler said.

“New refining capacity is being built primarily in OPEC+ countries or Asia, two regions where light and medium sour barrels are more prevalent,” Smith added.

U.S. export volumes could get a boost in the coming weeks due to production constraints in Libya and elsewhere, and as U.S. refineries begin maintenance, pushing more domestic barrels into the water.

Refiners that typically import light sweet crude could seek to replace Libya’s Sharara with US WTI Midland, among other grades, trade sources said, after Libya’s National Oil Corporation declared force majeure on the Sharara field on Aug. 7.