Energize Weekly, October 17, 2018
U.S. crude oil exports surged in the first half of 2018 as the use of the largest supertankers grew dramatically.
Crude oil overtook hydrocarbon gas liquids as the biggest U.S. petroleum export product. The 1.8 million barrels a day exported was 80 percent more than the first half of 2017, according to the federal Energy Information Administration (EIA). A new monthly record of 2.2 million barrels a day was set in June.
Enabling that large increase was the use of the massive “very large crude carriers” or VLCCs, which can transport up to 2.5 million barrels of oil in a single vessel, according to the Federal Reserve Bank of Dallas.
In the first half of 2015, no VLCCs were used to carry exported U.S. oil. By the first half of 2018, VLCCs carried 40 percent of the 289 million barrels of oil exported by water, according to ClipperData.
“If the average daily export volume observed in July and August were held constant through year’s end, U.S. water-borne exports would grow another 62 percent year over year in the second half of 2018,” the Dallas Federal Reserve said.
There are three types of vessels carrying most U.S. crude: VLCCs; Suezmax ships, with a 790,000 to 1.3 million barrel capacity; Aframax vessels, with a capacity of 528,000 barrels to 790,000 barrels; and Long Range 1, with a capacity of 296,000 to 528,000 barrels.
Suezmax ships carried about a quarter of the crude exports in the first half of 2018. Aframax vessels, which can call at most global ports due their smaller size, carried about a third of exports. The rest was shipped on Long Range 1 ships.
“Much of this crude oil went to destinations in Asia and Oceania such as China, South Korea, and India,” the EIA said. “Europe was the second-largest market for U.S. crude oil exports, led by Italy, the United Kingdom, and the Netherlands. Canada was the only major U.S. crude oil export destination where exports decreased, down slightly in the first half of 2018 compared with the same period in 2017.”
China was the largest export market, 376,000 barrels of crude a day between January and June of 2018. Canada was still the second largest market at 334,000 barrels a day. Italy was the third largest export market at 165,000 barrels a day, followed by the United Kingdom at 138,000 barrels a day.
