Unexpectedly Intriguing!
November 10, 2017

In December 2015, the U.S. Congress lifted a 40-year old ban on the export of crude oil from the United States. One month later, the U.S. exported a little over $0.5 billion worth of crude oil out of the country.

In September 2017, oil exports from the United States to foreign countries surged to $2.3 billion during the month, despite Hurricane Harvey's disruption of oil exports from Texas' gulf coast ports!

Value of U.S. Crude Oil Exports to the World and China, January 2016 - September 2017

Oil exports from the United States have grown so quickly that they are straining the oil industry's infrastructure:

Tankers carrying record levels of crude are leaving in droves from Texas and Louisiana ports, and more growth in the fledgling U.S. oil export market may before long test the limits of infrastructure like pipelines, dock space and ship traffic.

U.S. crude exports have boomed since the decades-old ban was lifted less than two years ago, with shipments recently hitting a record of 2 million barrels a day. But shippers and traders fear the rising trend is not sustainable, and if limits are hit, it could pressure the price of U.S. oil.

How much crude the United States can export is a mystery. Most terminal operators and companies will not disclose capacity, and federal agencies like the U.S. Energy Department do not track it. Still, oil export infrastructure will probably need further investment in coming years. Bottlenecks would hit not only storage and loading capacity, but also factors such as pipeline connectivity and shipping traffic.

With continued rapid growth of U.S. oil exports, those limitations could soon translate into new jobs, as the current maximum capacity of U.S. oil exports is estimated to be around 3.2 million barrels per day. During the first four full weeks of October 2017, the volume of U.S. oil exports were estimated to be about 1.7 million barrels per day, which would put the oil export industry's throughput at just over half of its capacity.

We thought it might also be interesting to see where all that U.S.-produced crude oil is going, so we tapped the U.S. Census Bureau's trade database to find out where all $2.313 billion worth of oil went in September 2017. The results are visualized in the following chart, which shows the 18 countries where all $2.313 billion worth of oil went.

Percentage Share of U.S. Crude Oil Exports, September 2017

Perhaps the biggest surprise is Canada's position at the top of the list, especially since Canada itself is an oil exporting nation that has the third largest estimated crude oil reserves in the world. The next most surprising thing is that over 41% of the oil exported from the United States in September 2017 was headed to Asian destinations.

It's a very different world than it was back in 2015!

Data Source

U.S. Census Bureau. U.S. Trade Online. Online Database]. Accessed 8 November 2017.

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