U.S. sets records for crude oil and natural gas exports in the first six months of 2023
Energize Weekly, October 18, 2023
The U.S. set export records for both oil and natural gas in the first half of 2023, with Europe as the prime destination, according to the federal Energy Information Administration (EIA).
Crude oil exports average nearly 4 million barrels a day – the highest since 2015 when the U.S. ban on most crude oil exports was repealed.
Compared to 2022, crude oil exports were up 19 percent for the first six months of the year, equal to 650,000 barrels a day.
For natural gas, the U.S. set a record in exports averaging 20.4 billion cubic feet a day for the first six months of 2023, a 4 percent increase over the same period in 2022. The U.S. became a net natural gas exporter in 2017 for the first time since 1957.
The main destination for both oil and gas was Europe, accounting for 44 percent of the crude oil exports and more than 60 percent of natural gas shipments.
European crude oil exports averaged 1.75 million barrels a day. Asia was the second biggest destination averaging 1.68 million barrels a day, led by exports to China and South Korea.
Other destinations for smaller amounts U.S. crude oil included Canada, Africa, and Central and South America.
“Although exports increased in the first half of 2023, the United States still imports more crude oil than it exports, meaning it remains a net crude oil importer,” the EIA said.
This position as a net import comes even as domestic crude oil production has increased. This is because many U.S. refineries are configured to process heavy, sour crude – which has a high sulfur content – rather than the light, sweet crude produced in the U.S.
“U.S. crude oil imports come primarily from historical trading partners such as Mexico and Canada,” the IEA said. “Heavy, sour grades of crude oil are often discounted compared with light, sweet grades of crude oil because they require more complex refinery units to produce profitable yields of refined products such as motor gasoline, diesel, and jet fuel.”
It is more profitable for some U.S. refineries to process these cheaper heavy crude oils because they have already made the capital investments to be able to handle them.
Some U.S. refiners on the Gulf Coast have invested in expanding their light, sweet crude oil processing capacity, the EIA said, but refiners, particularly in the Midwest and along the Gulf Coast, still find processing sour crude oil grades more profitable.
Natural gas shipments were mainly driven by the expansion of liquified natural gas (LNG) export capacity on the Gulf Coast. Although pipeline shipments to Canda and Mexico also rose.
LNG exports for the first six months of 2023 averaged 11.6 billion cubic feet a day, which made the U.S. the world’s biggest LNG exporter. This was a 4 percent increase compared with the same period in 2022.
The first LNG export terminal, Sabine Pass, began operation in 2016. There are now seven large LNG export facilities in the U.S., according to the U.S. Department of Energy.
The United Kingdom was the main destination for U.S. LNG, with four other countries – the Netherlands, France, Spain, and Germany – also major buyers.
Pipeline shipments also increased 4 percent year-over-year for the first six months of 2023 averaging 8.8 billion cubic feet a day, with two-thirds of that gas going to Mexico.
