EIA: Net Petroleum Product Exports Continue to Increase

More than half of the nation’s refinery capacity is located in PADD 3, and roughly 75% of U.S. product exports are sent from the region. Through April, Gulf Coast petroleum product exports were up 444,000 bbld compared with the same period last year. Gasoline, distillate, and jet fuel exports combined accounted for 40% of the increase. The higher gasoline and distillate exports were sent to countries in the Western Hemisphere, while gasoline exports decreased slightly. Jet fuel exports primarily increased to Western Europe, Central America (including Mexico), and South America, and to a lesser extent Africa. Propane and naphtha exports are each more than 150,000 bbld higher than last year, and are primarily sent to Asia, according to EIA.

Product imports remain an important source of supply on the East Coast, supplementing in-region refinery production and receipts from the Gulf Coast, and to a lesser extent, the Midwest, or PADD 2. Motor gasoline product supplied has been 71,000 bbld higher so far in 2015 compared to last year, and imports of total motor gasoline—including both blending components and finished gasoline—have increased by 103,000 bbld to meet demand.

Petroleum product markets on the U.S. West Coast are typically tightly balanced, with in-region refinery production nearly evenly matched with demand. The West Coast is largely isolated from the rest of the country’s petroleum markets because there are no pipelines that cross the Rocky Mountains. However, in recent years the region’s supply of distillate fuel has exceeded demand and, as a result, exports have increased. West Coast distillate exports have averaged 117,000 bbld so far this year, in line with the previous two years and 37,000 bbld higher than in 2012. During times of supply disruptions, imports to the West Coast often increase to replace lost supply from in-region refineries, as has been the case so far in 2015.

Following an outage caused by an explosion and fire at ExxonMobil’s Torrance, Calif. refinery in mid-February, gasoline imports to the West Coast have increased and have averaged 37,000 bbld so far this year, more than double compared with the same period last year.

EIA comments that over the past decade, domestic output of petroleum products has grown significantly, while consumption has declined, driving a major increase in net product exports. Going forward, the amount of net exports will depend on underlying trends in both output and consumption of petroleum products. Future output will reflect both U.S. refinery runs and the production of hydrocarbon gas liquids outside refineries. Future domestic consumption will reflect prices, economic activity, and policies such as fuel economy standards for both light- and heavy-duty vehicles. Therefore, so long as domestic output of petroleum products grows faster than their consumption in the U.S., net petroleum product exports will continue to rise.