U.S. crude oil exports surge to record as tankers flock to Gulf Coast

The Port of Corpus Christi has never been busier as tankers from around the world flocked to the U.S. Gulf Coast to load crude oil during the Iran war.

Before the war, the Texas port was the third largest oil export terminal in the world, after Ras Tanura in Saudi Arabia and Basra in Iraq.

Its importance increased even more as the two major Persian Gulf ports were largely cut off from the world due to US crude oil exports reaching record levels and Iran’s blockade of the Strait of Hormuz.

U.S. oil exports rose to 5.2 million barrels per day (bpd) in April, according to data from Kpler, an increase of more than 30% from the 3.9 million barrels per day exported in February before the war.

CEO Kent Britton said March was the busiest month in the history of the Port of Corpus Christi and the first quarter was the busiest quarter ever. Britton said oil exports have increased since the start of the war to about 2.5 million barrels per day, compared with 2.2 million barrels per day last year.

Ship traffic in Corpus Christi increased to more than 240 ships in March, compared to the 200 ships the port normally sees in a month, the CEO said.

“It’s a constant parade of tankers going in and out,” he said.

asian buyers

According to Kpler data, Corpus Christi accounted for nearly half of US crude oil exports in April, while Houston accounted for most of the rest.

About 50 to 60 large tankers, called very large crude oil carriers (VLCCs), are currently heading to U.S. ports on any given day, according to data from Kpler; This is double the volume seen last year. VLCCs can typically carry up to 2 million barrels.

Most of those tankers came from Asian countries that imported their oil from the Middle East before the war, said Matt Smith, Kpler’s director of commodity research. Since the trade route to the Persian Gulf via the Bosphorus is effectively closed, they are now turning to the US Gulf Coast.

“Asian markets are buying everything they can get their hands on, so they are buying plenty of light sweet crude,” Smith said.

Corpus Christi also saw a huge increase in refined product exports to the Middle East. CEO Britton said the volume of exports to the region was higher in the first quarter than all of last year.

Export limits

The rerouting of ships to the US Gulf Coast is likely a wartime crisis measure rather than a permanent realignment of Asian buyers to the US.

Kpler’s Smith said the light sweet crude produced by the United States cannot replace sour barrels from the Middle East because many refineries are configured to optimize heavy feedstocks.

Moreover, U.S. oil exports are likely capped at just over 5 million barrels per day due to port capacity, Smith said. CEO Britton said Corpus Christi’s export capacity has reached about 2.6 million barrels per day due to pipeline constraints, but could likely handle another 500,000 barrels per day if pipelines were expanded.

The United States, Latin America and West Africa could help supply increased barrels to Asian buyers in need. But Smith said the Middle East is too big an oil producer to replace it. Before the war, approximately 20% of the global oil supply was exported through the strait.

“This is a hole that can’t be plugged,” Smith said. “The answer must be ensuring safe supply from the Middle East.”