Last week, the United States came close to becoming net exporters of crude oil for the first time since World War II. Shipments surged, nearly reaching a historical record, driven by the demand from Asian and European buyers desperate to replace flows from the Middle East disrupted by the war with Iran.
The conflict between Iran, the United States, and Israel caused the most severe disruption ever recorded in the global energy market. Iranian threats to maritime traffic paralyzed transit through the Strait of Hormuz, where about a fifth of the world’s oil and gas supply usually passes.
Refiners in Asia and Europe, dependent on these supplies, rushed to secure all available alternative cargoes, boosting demand for U.S. crude, the world’s top producer.
However, analysts and traders point out that the United States is quickly approaching its maximum export capacity.
According to government data released on Wednesday, net imports of crude – the difference between imports and exports – decreased to just 66,000 barrels per day (bpd) last week, a historic low since the start of the weekly statistical series in 2001. Meanwhile, exports rose to 5.2 million bpd, a seven-month high.
On an annual basis, the last time the United States was a net exporter of crude was in 1943.
The surge in U.S. exports reflects the fact that buyers from the Atlantic basin and Asia are seeking increasingly distant sources of supply, with regional price differentials offsetting transportation costs, explains Janiv Shah, vice president of oil markets at Rystad.
Countries like Greece have recently purchased U.S. crude for the first time in recent months.
According to maritime tracking service Kpler, about 2.4 million bpd, or 47% of U.S. exports last week, headed to Europe. Asia received around 1.49 million bpd (37%), up from 30% a year earlier.
Key buyers include the Netherlands, Japan, France, Germany, and South Korea.
A vessel carrying 500,000 barrels also indicated its destination as Turkey, which would mark the first U.S. export to that country in at least a year, according to Kpler.
At the same time, U.S. imports dropped by over a million bpd to 5.3 million bpd last week. The United States continue to import heavily because their refineries are designed to process heavier and more sulfur-rich grades of crude than the light sweet crude they produce domestically.
Disruptions in the Middle East have widened the premium of Brent crude over U.S. West Texas Intermediate (WTI), reaching as high as $20.69 per barrel last month. This differential has discouraged U.S. imports while making domestic crude extremely competitive for European and Asian refiners.
The price of physical cargoes for immediate delivery in Europe hit a historical high near $150 per barrel on Monday, while prices for Africa also reached new peaks, according to LSEG data and traders.
U.S. exports are expected to be around 5.2 million bpd for April, says analyst Matt Smith of Kpler, adding that monthly flows are now hitting capacity limits.
The United States can export up to 6 million bpd, according to traders and analysts, who point to constraints related to pipelines and vessel availability. The annual record stands at 5.6 million bpd in 2023.
“The market is already testing the export ceiling with 5.2 million bpd last week. Each additional barrel costs more in logistics and freight than the previous one,” emphasizes Bekzod Zukhritdinov, a trader based in Dubai.
Releasing medium sulfur crude from the Strategic Petroleum Reserve could free up more light qualities for export, notes Rystad’s Janiv Shah. However, he warns that a shortage of tankers and rising freight rates could slow this momentum.
About 80 empty supertankers were heading to the Gulf of Mexico on Wednesday to load crude for April and May, according to senior analyst Rohit Rathod of Vortexa.
