For the first time ever, oil is expected to be the US’s largest export good this year, demonstrating the growing impact of American oil exports and production on the world oil market.
As it prepares for record-high output in 2023 and 2024, the US oil supply offset some of the Organization of Petroleum Exporting Countries and Allies’ cuts in the first half of this year.
The Energy Information Administration (EIA) predicts that crude oil production in the US will average 12.92 million barrels per day (bpd) this year and 13.12 million bpd next year, setting new records.
Also, oil exports are at an all-time high, averaging 3.99 million bpd in the first half of 2023, up nearly 20 percent from last year.
According to an analysis by Ken Roberts at WorldCity, a company that tracks US exports based on US Census Bureau data, US oil exports were the largest export of all categories in America’s trade with the world through August this year and are likely to be the same for the full year 2023—for the first time.
The WorldCity data revealed that the value of US oil exports in August alone was $10.3 billion, accounting for 6 percent of total American exports, followed by gasoline and other fuels. In terms of tonnage, oil had the highest share—24 percent—followed by liquefied natural gas, petrol, and other fuels.
According to the analysis by WorldCity’s Roberts published in Forbes, “the primary oil category will be the US’ top export when 2023 figures are released early next year.”
Oil exports from the US have increased along with the rise in production ever since the US lifted a ban on the export of crude oil in 2015, which had previously only been allowed to Canada.
Due to the lower supply from OPEC+, the embargo on Russian crude, and a growing global demand for competitively priced barrels, the increase has become more pronounced in the last two years.
Despite the fact that American crude is typically lighter and sweeter in nature than the best grades from Russia and the Middle East, America’s exports have recently been partially offsetting the OPEC+ cuts.
According to the EIA, Europe accounted for 1.75 million bpd of all US crude oil exports during the first half of 2023, with exports to the Netherlands and the UK leading the way. With 1.68 million bpd, Asia came in second, driven by US oil exports to China and South Korea. Additionally, the US exported much less crude oil to Canada, Africa, Central America, and South America.
US oil has grown to be so significant for the global market in less than ten years since the export ban was lifted that WTI Midland was added in June to the Brent basket of crude oil grades that serves as a benchmark for pricing the most active oil contract in the world.
The amount of US crude exported, which has averaged around 4 million bpd since the year’s beginning, is again why WTI Midland is playing a larger and larger role in the Dated Brent assessment.
America’s oil exports have increased over the last two years and are expected to surpass all other exports in 2023 due to the demand for American oil in Europe and Asia when arbitrage permits.