US raw exports reached the lowest four years in July with a low domestic supply
US crude oil exports subsided in July to the lowest level in almost four years with low domestic supply and when Asian and European buyers found a cheaper alternative, damaging US President Donald Trump for more foreign countries to buy US energy supplies.
The decline in exports from the top global producers underlines the extent to which the oil flow is determined by the price and economy of shipping, even when the new Trump administration is encouraging countries to commit to more US oil purchases as part of trade negotiations.
Exports fell to around 3.1 million barrels per day (BPD) in July, the lowest since October 2021, when Pandemi Covid-19 undermined the request, according to data from the KPler ship tracking company.
The average export of 3.2 million BPD over the past five weeks, compared to 3.6 million BPD in June, according to the administration of US Energy Information. The decline occurred when the spread between European crude oil benchmarks and the US narrowed, making it less attractive economically to send barrels across the Atlantic.
“The market is driven by the economy, and the company is driven by profits, so the company will continue to buy what is the cheapest or the best raw material for them,” said Matt Smith, the main oil analyst at the KPler.
“There is a very, very gradual impact (from a trade agreement on US crude oil exports), but it will not move the needle,” Smith added.
WTI discounts to May and June, when oil was sent in July, on average around $ 3 per barrel, far above a $ 4 discount which usually encourages foreign countries to buy US oil.
“There is no incentive there to push the barrel out. They are more needed at home than abroad,” Smith said.
US crude oil exports to Asia fell to 862,000 BPD in July, the lowest since January 2019, and far below an average of three months 1.1 million BPD, KPler data shows.
China, the world’s leading oil consumer, did not take barrels for the fifth month in a row due to trading tension continued between the two countries, while shipping to South Korea, the second largest buyer of US crude oil in 2024, was almost divided into two in July, and they went to India 46%.
Meanwhile, exports to Europe dropped 14% to 1.6 million BPD from June.
Oil inventory at the main storage center in Cushing, Oklahoma, floated right above the operational level, in the middle of the lower Canadian oil flow due to fire and the expansion of the Trans Mountain pipe last year. That makes more domestic barrels in the US, traders and analysts said.
The price for WTI Midland in Cushing is around 40 cents higher than the price for that along the Bay Coast, said Jeremy Irwin, leading global crude oil in the energy aspect. The higher US purification activity also encouraged several barrels to live locally, said Irwin.
Canadian crude oil exports from Teluk As Beach also alleviate 31% to 78,000 BPD in July, when US refiners take barrels to replace the lower imports of Venezuela and Mexico.
Short -lived rebounds visible
Exports to Asia US crude oil are expected to step in the fourth quarter when the Middle Eastern oil price is strengthened, so it is more economical to send oil to Asia from the US, a trading source last week.
The energy aspect estimates an increase of 400,000-BPD to August from July at US Teluk Exports.
While Washington’s encouragement for countries to commit to energy purchases as part of a trade agreement can help higher inch exports in the short term, traders and permanent analysts to the long-term encouragement for exports of the agreement.
South Korea said it will buy liquid energy or other energy products worth $ 100 billion, while the European Union promised to buy $ 250 billion in US energy supply per year.
Pakistan will import the first US crude oil cargo in October, while the largest Indian Pemilang in India, Indian Oil Corp bought 4.5 million barrels of US crude oil this week because Trump threatened to increase tariffs in the country for the purchase of Russian oil.
Purchase from a trade agreement is likely to only encourage US exports for two or three months, said Jeremy Irwin, leading global crude oil in the energy aspect.
Furthermore, the increasing supply of OPEC+ especially until the end of the year is regulated to increase options for European and Asian refiners, and can burden export demand for sweet US crude oil.
This group agreed on Sunday to increase oil production by 547,000 BPD for September, marking the full reversal and the beginning of the largest output deduction stage.
Source: Reuters
