U.S. Exports More Crude, Petroleum Products Than Imports in September

(January 9, 2020) — The U.S. exported 89,000 bbld more crude oil and petroleum products than it imported in September, the first month this has happened since monthly records began in 1973, reports the Energy Information Administration (EIA). The agency explains that net petroleum trade is calculated as total imports of crude oil and petroleum products, less total exports of crude oil and petroleum products.

The U.S. currently imports more crude oil than it exports, but it exports more petroleum products than it imports. The balance of this petroleum trade has been changing over the past decade, from annual net petroleum imports of 9.6 MMbbld in 2009 to annual net imports of 2.3 MMbbld in 2018. Long-running changes in U.S. trading patterns for both crude oil and petroleum products have resulted in a steady decrease in overall U.S. net petroleum imports.

Rising U.S. crude oil production, which rose from an average of 5.3 MMbbld in 2009 to 12.1 MMbbld through September 2019, has resulted in a decrease in U.S. crude oil imports from an average of 9.0 MMbbld in 2009 to 7.0 MMbbld through September 2019. The decline in crude imports also corresponded with a decrease in the number of sources the U.S. imported oil from.

In December 2015, the U.S. lifted restrictions on exporting domestically produced crude oil. Since then, the nation’s exports have been the largest contributor to U.S. petroleum export growth. Oil exports have grown from 591,000 bbld in 2016 to 2.8 MMbbld in 2019 through September. Despite rising exports of crude, however, the U.S. remains a net oil importer. The U.S. continues importing primarily heavy, high-sulfur crude oils that most U.S. refineries are configured to process, and more than 60% of U.S. crude oil imports come from Canada and Mexico. At the same time, U.S. refineries responded to increasing domestic and international demand for petroleum products such as distillate fuel, motor gasoline, and jet fuel by increasing throughput. Gross inputs into U.S. refineries climbed from an annual average of 14.6 MMbbld in 2009 to 17.0 MMbbld through the third quarter of 2019, and they have regularly set new monthly record highs.

The increase in refinery production of petroleum products has outpaced the rise in U.S. consumption, contributing to a jump in petroleum product exports. The U.S. has gone from net petroleum product imports of 698,000 bbld in 2009 to net petroleum product exports of 3.2 MMbbld through September 2019. In the first nine months of this year, the U.S. exported 1.4 MMbbld of distillate, 1.1 MMbbld of propane, and 864,000 bbld of motor gasoline, the three largest petroleum product exports.

Although seasonal monthly import and export patterns may result in month-to-month, back-and-forth changes between net imports and net exports for some products such as motor gasoline, the U.S. has been a net exporter of several products on an annual basis. The U.S. has been an annual net exporter of distillate and residual fuel since 2008, a net exporter of hydrocarbon gas liquids and jet fuel since 2011, and a net exporter of motor gasoline since 2016.

Earlier, EIA’s Short-Term Energy Outlook forecast that the U.S. would transition to net petroleum exports in September 2019. In its November Outlook, the agency saw U.S. net petroleum exports continuing to increase, averaging 751,000 bbld in 2020. This would mark the first time the nation is expected to be a net petroleum exporter on an annual basis.

(SOURCE: The Weekly Propane Newsletter, January 13, 2020)