U.S.Close to Being the Largest Oil Exporter
In December, the United Arab Emirates purchased oil directly from the U.S., instead of from a close-by Gulf petro-state.
According to the Census Bureau, the U.A.E. exported 700,000 barrels of U.S. oil because they were in the market for a very light crude oil of superior quality for the state’s processing plants. This was the OPEC producer’s fourth-largest export from the U.S. in history, according to the Energy Information Administration.
The U.A.E. used to export this type of light crude from Qatar, but the Arab country ban exports from its Middle Eastern neighbor in 2015.
“As a member of OPEC and a large crude producer, I would imagine they would be very self-sufficient in their own crude supply,” said Andy Lipow, president of Lipow Oil Associates LLC.
Although shipments to U.A.E. aren’t likely to continue, exports of U.S. oil are on the rise.
In November, shipments increased to 1.53 million of barrels a day, which is a significant spike from the 100,000 a day in 2013.
Exports are expected to increase 1.5 million barrels per day sometime later this year, which is a 45 percent spike from last year.
This is partly due to the high demand from customers in Europe and Asia.
“The second half of the year is when (oil) production growth overwhelms,” said Amrita Sen, co-founder and chief oil analyst at Energy Aspects at the Argus Americas Crude Summit. “Gulf Coast exports will be strong.”
“Unipec plans to trade up to 300,000 bpd of U.S. crude oil by the end of this year, about triple its trading volume last year, the president of the Chinese trading company said. An arm of oil refiner Sinopec, Unipec currently trades about 200,000 bpd of U.S. crude, President Chen Bo told reporters at the conference,” writes Reuters. “The Americas could replace Africa by 2020 as Asia’s second-largest oil supplier, behind the Middle East, Bo said, with U.S. crude prices now considered competitive with West African and North Sea grades.”
President Donald Trump repeatedly said on his campaign trail that the U.S. needs to become much less dependent on energy from other countries. With that in mind, his administration has proposed a plan to do just that and expand offshore areas of the Outer Continental Shelf for drilling by 90%.
“We’re going to become the strongest energy superpower,” said Ryan Zinke, Interior Secretary. “We certainly have the assets to do that.”
So the U.S. production is evidently going to increase within the next few years.
The U.A.E. oil production, on the other hand, has decreased to 2.85 million barrels a day, compared to the 3.07 million at the end of 2016. This is due to the OPEC deal limiting the production of oil to manipulate the prices to keep them higher.
Author’s note: With the recent extension of the OPEC oil deal that will continue until the end of 2018, it’s time for the U.S. to ramp up production. This shows how efficient the oil industry in the U.S. can be.