Energize Weekly, June 19, 2019
U.S. crude oil imports from the Organization of the Petroleum Exporting Countries (OPEC) fell in March to 1.5 million barrels a day, the lowest level in 33 years, based on data from the federal Energy Information Administration’s (EIA) “Petroleum Supply Monthly.”
The drop to a level not seen since March 1986 was due to a suite of factors including increased domestic production and imports from outside the 14 OPEC countries, as well as some geopolitical forces, the EIA said.
For three decades, beginning in the early 1980’s, OPEC member countries supplied about half of all U.S. crude imports, but in the last 10 years, OPEC imports fell as U.S. production increased with the development of drilling in shale formations. In 2018, U.S. crude oil production hit a record 11 million barrels a day.
Non-OPEC countries – including Canada, Mexico, Brazil and Colombia – have also become bigger exporters of crude oil to the U.S. In each of the last four years, Canada has been the source for more U.S. imports than all the OPEC countries combined.
Over the last few years, oil imports from Venezuela declined due to problems with mismanagement of the national oil company, Petróleos de Venezuela, S.A., and the country’s ongoing political turmoil. The U.S. had been the prime destination for Venezuelan oil. In 2018, Venezuela was the source of 505,000 barrels a day of imports, 20 percent of all the oil imported by the U.S. from OPEC.
In January 2019, the U.S. tightened oil sanctions on Venezuela leading to a precipitous decline in imports from that country. In March, Venezuelan imports were down to 47,000 barrels a day, and there were some weeks in March and May when there were no Venezuelan imports of crude oil at all.
U.S. imports also dropped after the 2016 agreement by OPEC and several non-OPEC producers, such as Russia, to curtail production to firm up crude oil prices. This led to reduced exports to the U.S. as some suppliers focused on Asia, the agency said.
In the first quarter of 2019, the volume of U.S. crude oil imports from Saudi Arabia and Iraq – the two largest sources of imports from OPEC in 2018 – have averaged 26 percent and 28 percent below their 2018 average levels, the EIA said.
Where oil imports are being used in the U.S. has also shifted. The Gulf Coast region has been the largest importer accounting for 55 percent of the oil entering the U.S. In the first quarter of 2018, the West Coast region was importing more oil as was the Midwest, which also saw more crude oil imports – mainly from Canada – than the Gulf Coast.
