Three months since the U.S. lifted a 40-year ban on oil exports, American crude is flowing to virtually every corner of the market and reshaping the world’s energy map, Bloomberg reports.
Overseas sales, which started on Dec. 31 with a small cargo, have been picking up speed during the first quarter. Oil companies including ExxonMobil, China Petroleum and Chemical Corp. have joined independent traders such as Vitol Group and Trafigura Pte in exporting American crude.
The “growing volumes of exports” from the U.S. are now “spooking the markets,” according to Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd. in London. The “flurry of export activity” is helping to support spot oil prices in the U.S. relative to contracts for later delivery, she says.
With American stockpiles at unprecedented levels, oil tankers laden with U.S. crude have docked in, or are heading to, countries including France, Germany, the Netherlands, Israel, China and Panama. Oil traders said other destinations are likely, just as supplies in Europe and the Mediterranean region are also increasing.
That said, the U.S. is likely to remain for the foreseeable future a small exporter compared with OPEC giants Saudi Arabia, Iran and Iraq and non-OPEC producers Mexico and Russia. Ian Taylor, chief executive of Vitol, the company behind the first export, believes exports will remain a “very marginal business.”
Yet, tanker by tanker, overseas sales are growing. Enterprise Products Partners LP, one of the biggest operators of oil ports in the U.S., told investors this month it alone expected to handle exports of crude and condensates—a form of ultra-high quality oil—of about 165,000 barrels a day during the first quarter, up almost 28% from the 2015 average.
