U.S. Became a Net Exporter of Crude Oil
The U.S. Gulf Coast became a net exporter of crude oil in late 2018 as crude oil exports increased, and imports decreased. As a result of its strong oil production growth, in the last two months of 2018, the U.S. Gulf Coast exported more crude oil than it imported, according to the Energy Information Administration.
In November 2018, U.S. Gulf Coast crude oil production set a new record of 7.7 million b/d. This increased production allows for more of the increasing U.S. crude oil production to be exported. Because more than 90% of U.S. crude oil exports leave from the U.S. Gulf Coast, crude oil exports from the region set a record high of 2.3 million b/d in December. In each of the last three months of 2018, the U.S. Gulf Coast exported more than 2 million b/d.
As U.S. crude oil production has increased, U.S. total and Gulf Coast region crude oil imports have decreased. Gulf Coast gross crude oil imports reached record lows in the final months of 2018, with imports of 1.9 million b/d in December compared with 3.7 million b/d at the same time five years ago. In particular, Gulf Coast crude oil imports from members of the Organization of the Petroleum Exporting Countries (OPEC) fell sharply in the final two months of 2018, from an average of 1.5 million b/d in the first half of 2018 to 1.1 million b/d in December.
According to the International Energy Agency’s World Energy Outlook, the United States continues to dominate supply growth in the medium term. As a result of its strong oil production growth, the United States will become a net oil exporter in 2021, as its crude and products exports exceed its imports. Towards the end of forecast, the U.S. gross crude oil exports will reach 9 mb/d, overtaking Russia and catching up on Saudi Arabia. The transformation of the United States into a major exporter is another consequence of its shale revolution.
Brent crude oil spot prices averaged $64 per barrel (b) in February, up $5/b from January 2019 and about $1/b lower than at the same time last year. EIA forecasts Brent spot prices will average $63/b in 2019 and $62/b in 2020, compared with an average of $71/b in 2018. EIA expects that West Texas Intermediate (WTI) crude oil prices will average $9/b lower than Brent prices in the first half of 2019 before the discount gradually falls to $4/b in the fourth quarter of 2019 and throughout 2020.