This year the U.S. has averaged more than 900,000 barrels per day (BPD) of crude oil exports while continuing to import an average of 8.1 million BPD. In the previous article, I discussed the reasons the U.S. exports oil, despite the fact that we are still a significant net importer of crude oil.
In a nutshell, the quality of the oil that is being exported is often a better fit for foreign refineries than the oil that is imported. It may also be logistically preferable to ship domestic oil to certain foreign refineries.
From 1975 until late 2015, a crude oil export ban restricted crude oil exports from the U.S. to all countries besides Canada. In the years leading up to the U.S. shale oil boom, the U.S. was exporting less than 30,000 BPD to Canada.
By 2013, crude oil exports to Canada had jumped to 134,000 BPD. That was also the year that crude oil being exported from the Bakken Shale in North Dakota to a refinery in Saint John, New Brunswick derailed, caught fire, and killed 47 people in Lac-Mégantic, Quebec. Despite the tragedy, crude oil exports to Canada continued to grow, reaching 427,000 BPD in 2015.
Canada remains the predominant destination for U.S. crude oil exports, but because of the repeal of the crude oil export ban, the U.S. exported crude oil to nearly 30 countries last year. By 2016, the total had grown to 591,000 BPD of U.S. crude oil exports. Thus far in 2017, monthly exports have averaged over 900,000 BPD, and have exceeded one million barrels per day (BPD) on multiple occasions.
Here were the Top 10 destinations for U.S. crude oil exports in 2016:
Destination of U.S. crude oil exports in 2016.
– Volume – Thousand barrels per day
– Percentage – Percentage of total U.S. petroleum exports
Canada was the destination for nearly 61% of U.S. crude oil exports last year, but it is important to note that we import far more oil from Canada (~3.2 million BPD in 2016). Thus far in 2017, Canada’s share of U.S. exports has plunged to 34%, while China has jumped from a 3.7% share in 2016 to 20% through July of this year.
Of course, the crude oil export ban didn’t cover finished products like gasoline and diesel. So, even a decade ago, the U.S. was exporting around a million barrels a day of these products to countries around the world.
But then the shale boom provided U.S. refiners with high quality, discounted crudes that they were then able to sell into the export market. As a result, finished product exports jumped from about a million barrels a day prior to the shale boom up to 4.7 million BPD in 2016. Here were the Top 10 destinations of finished product exports last year:
Destination of U.S. petroleum product exports in 2016.
Note that Mexico, which doesn’t even rank in the Top 10 for U.S. petroleum exports, is the top destination for U.S. finished product exports.
The overall impact of increasing crude oil and finished product exports is that U.S. net imports — which means the amount of petroleum and finished products we import minus those we export — has fallen from a high of over 13 million BPD in 2005 to under 5 million BPD.