U.S. crude exports are rebounding this month, dragging down prices of crude oil produced in Europe and Africa in a relatively tepid market, traders told Bloomberg on Friday.
After a temporary dip in April, U.S. oil flows to Europe have rebounded so far in May, according to ship tracking data that Bloomberg compiled.
In the first three weeks of May, it is estimated that observed US crude oil exports to Europe are recovering and that they average at least 2.1 million barrels per day (bpd), up a third from average April shipments, according to the data.
The increase in exports was also driven by the decline in the price of WTI Midland grade from the United States. WTI Midland spreads fell to their lowest levels in over a year.
WTI Midland was added to the Brent basket in June 2023 and has been a major driver of the surge in US crude exports over the past year, especially to Europe.
The WTI crude oil included in the Brent Dated price is delivered to Rotterdam, a large crude oil storage and trading hub in the Netherlands. As a result, the Netherlands received more U.S. crude exports than any other country in 2023, averaging 652,000 bpd, according to EIA estimates.
In total, US crude oil exports to Europe averaged 1.8 million bpd last year, slightly higher than US exports to Asia and Oceania of 1.7 million bpd. American crude has replaced much of Russian crude, which Europe imported before 2022.
As U.S. oil production increased 9% from the previous year, reaching a record high of 12.9 million bpd in 2023, and as many American refineries are designed to use heavier, more acidic crude, the excess light sweet crude from shale plays has found more buyers abroad.
However, at the moment, prices are low only because US production is extremely high and demand is low. However, environmental regulations could, sooner or later, limit American production.
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