US Flows To Watch: February 2021

Chart 1: US Crude Exports vs Imports

• US crude flows have undergone radical shifts over the past two years. Rising domestic production has increasingly found its way towards the export market, flipping the US’ status increasingly towards that of a net exporter. In fact since December 2019, the US has been a net exporter every month barring May-June 2020.
• In January 2021, exports outstripped import volumes to the tune of 700,000 b/d, up from 270,000 b/d surplus the same time last year. Weaker US oil products demand has forced crude import activity lower over the past 12 months.
• Read more in our recent report: ‘Opportunities in Crude Freight and Storage Markets’

Chart 2: US CPP Net Exports by PADD

• Declining US fuels demand is also reflected by the broad increase in US CPP exports in recent months. 
• The US Gulf Coast (PADD 3), the largest hub for refining capacity in the US, has been steadily lifting exports of transportation fuels and LPG since the second half of 2020.
• In contrast to rising PADD 3 exports, the US Northeast (PADD1) is becoming increasingly reliant on CPP imports from overseas, with regional refining capacity threatened by closures. PADD1 imports from overseas are more economical than seaborne imports from PADD 3 due to Jones Act shipping regulation.
• Read more about US CPP exports in our recent Insight note ‘US LPG exports meet Asia’s burgeoning demand’

Chart 3: US Gasoline vs Diesel Net Exports

• The US has historically been a diesel exporter, but a seasonal net importer/exporter of gasoline/blending components. Recent trends suggest that both products’ net flows are shrinking.
• Diesel net exports are falling, driven partly by elevated PADD 1 imports. While diesel typically flows west to east across the Atlantic, European diesel cargoes began heading westbound in October and are still flowing in February, supported by colder weather in the US Northeast.
• Gasoline/blending components flows oscillate from net imports to net exports, reflecting the surge in demand that takes place during the summer driving season. But the impact of Covid-19 on reduced road fuel consumption in key export markets in Latin America and domestically is stifling US refinery output.
• Net exports of US gasoline/blending components stood at just 106,000 b/d in January 2021, down from 380,000 b/d a year earlier.

To watch Vortexa Managing Director Clay Seigle discuss ‘How can US refineries be positioned to compete in the global marketplace in the face of falling domestic demand?” during the USAEE Webinar on ‘Oil Trade: Can the US Remain a Net Exporter?’, head over to this link. 

For more US-focused analysis, check out our ‘2021 Trends to Watch in US Energy’ special report