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SPR Sales Keep US on Track as Large Net Exporter

  • Strategic oil reserve sales added 600,000 b/d to US supply in 2022.
  • In 2023, US is on track to become an even larger net exporter.
  • China is re-emerging as a large buyer of US oil products.

The US is poised to achieve the status of a net exporter of fuel in 2022 in part thanks to the sale of close to 220 million barrels of crude oil from the government-controlled strategic petroleum reserve (SPR).

These SPR sales added an average 600,000 b/d to available US supply, which pushed exports to new levels and reduced crude oil imports.

For the whole 2022, the total net export of US fuels is expected to come in close to 1.1 million b/d, which compares to a net export position of 60,000 b/d in 2021 and 635,000 b/d in 2020.

Rising oil output last year also helped solidify the status of a net oil exporter, first established in 2020 after the shale revolution pushed growth of crude and natural gas liquids (NGLs) output consistently beyond domestic oil demand gains.

Sea-Change in Balance

US demand growth of 565,000 b/d in 2022 was more than offset by rising liquids output of 1.26 million b/d. The difference went into commercial inventories and rising exports.

Longer term, the change in trade status has been striking. In 2005, when demand was 20.8 million b/d, the US was a net importer of 12.5 million b/d.

Last year's demand was at 20.3 million b/d, and this year it is expected to grow by 200,000 b/d. But supply is expected to add 1.2 million b/d. Without changes in inventories, this would give the nation an extra 1 million b/d in export volume.

SPR sales are expected to fall away in 2023, which would leave the US a net exporter of around 1.5 million b/d in 2023.

The SPR caverns had close to 375 million bbl of crude by year-end, which was 218 million bbl less than end-2021.

China Snaps Up Products

US Energy Information Administration (EIA) data show that China continued its regular intake of crude oil but stepped up buying of natural gas liquids (NGLs) in October.

The EIA’s Petroleum Supply Monthly (PSM) shows that China bought 911,000 b/d of US fuels in October, of which 332,000 b/d was crude and 579,000 b/d refined products. The bulk of products was NGLs at 427,000 b/d, and the balance was petroleum coke.

The October volume was the highest since December 2020, while 2022 is on track to be as high as 2021 at around 630,000 b/d. China’s appetite for the US' NGLs is higher than ever with demand growing for US ethane, a key feedstock for new petrochemical capacity.

China buys close to 100,000 b/d of petcoke from the US, which is mostly used in processing metals.

Old Demand

US oil demand in October was seen at 20.41 million b/d, according to the PSM, which is very close to the weekly EIA data — or just 40,000 b/d higher. In the May-September period, the monthly data has been an average 540,000 b/d higher than weekly numbers.

Monthly EIA data is based on a survey, while weekly data is mostly based on models. While the monthly data is more accurate, it is older and typically ignored by the forward looking market.

The US exported 9.76 million b/d of crude oil and refined products in October, PSM data showed. The largest export destinations were Mexico (1.03 million b/d), China (911,000 b/d), Canada (809,000 b/d), India (700,000 b/d), South Korea (607,000 b/d), Japan (582,000 b/d) and the Netherlands (551,000 b/d).

The US imported 8.13 million b/d of crude and products in October, with the largest supplier as before coming from Canada at 4.24 million b/d, while Mexico supplied 867,000 b/d. Saudi Arabia, Iraq, Brazil, Colombia and Ecuador are also key crude suppliers.

US Crude Exports, October 2022
MonthlyMonthlyAvg.Avg.
('000 b/d)Oct'22Oct'2120212020
All Destinations4,1462,7792,9633,206
India672560420281
Netherlands378258286298
Korea344325349269
Canada336385311420
United Kingdom243220233247
China206705256481
Singapore177014391
Italy170120114140
Taiwan15947145158
Switzerland1470144
Spain114238663
France967110281
Germany906978101
Thailand711013776
Uruguay5201717
Dominican Republic35162510
Australia2401329
Norway2424386
Peru24231920
Denmark22233031
Ireland22393943
Brazil18285334
Colombia18181915
Nicaragua91299
Belgium1015
Lithuania04826
Other694-33620
US Crude Oil Imports, October 2022
CanadaMexicoSaudi ArabiaColombiaBrazilIraqLibyaGrand Total
('000 b/d)Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21
Phillips 66431505678964183211--------7954872847
Marathon443280823832-----64--48------756365
Chevron171811158115958527901654888--611394
Exxon Mobil429446------------------------438498
PBF Energy91821045012969--1529710------415262
BP345480------------1428--------359507
Valero2121175132----------477732----321319
Flint Hills239230------------------------239230
Cenovus Energy202157------------------------202157
Houston Refining8582345311--3264------------202219
PDV Midwest Refining149138------------------------149138
HF Sinclair REFG & MKTG LLC134--------------------------134--
Suncor131109------------------------131109
Canada Imperial11692------------------------11692
Tidal Energy11484------------------------11484
Top 152,9482,7235744193511821491171989918912088545,0604,223
Total Companies3,7453,6276815224143532191811981231951851211216,2375,971
Total Imports3,7453,6276815224143532191811981231951851211216,2375,971
US Petroleum Product Exports, October 2022
Total ProductsTotal ProductsNGLsNGLsMogasMogasJet KeroJet KeroDistillatesDistillatesResidsResidsPet CokePet CokeOtherOther
('000 b/d)Oct'22Oct'21Oct'22Oct'21Oct'22Oct'21Oct'22Oct'21Oct'22Oct'21Oct'22Oct'21Oct'22Oct'21Oct'22Oct'21
All Destinations5,6165,4472,3932,2298649491641261,0851,0289646607565407504
Mexico1,0271,085204269455427295125423871033454646
Canada42650017926225883920141765261313796
Japan4844314443460000000023741711
China579355427265000000001519011
Brazil2223770534460100971290048612374
Indonesia8213382133000000000000
India19115467850000001011559710
Korea1781211481160000001708045
Chile3051774631726620416062090075
Peru156119151735235285730020144
Netherlands138174105370380901100225112
Dominican Republic918940419224317156013622
Panama13111929217221112576517160012
Guatemala1009500514424253110211501
Ecuador13410326340000834700002622
Colombia14711551484789384200204516
Honduras747012181217213024908910
Costa Rica6052373020521718400421
Spain11124760000100000351410
Egypt40564056000000000000
France5111465000000001541
Morocco386038340000000002600
Singapore50285019000009000010
El Salvador52401081513612111000512
United Kingdom10513041911901239180032317
Bahama Islands4374021020203147000005
Other60075626129821781241091821771191156171
US Petroleum Product Imports, October 2022
CanadaMexicoIraqUnited KingdomSouth KoreaIndiaMalaysiaGrand Total
('000 b/d)Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21
Other Oils612311952100--1359019154--601552
Motor Gasoline849749----8362223340666--504581
Residual Fuel Oil9346267------2--------12--204212
LPG/Chemicals170157------------------------175159
Middle Distillates105100------------113--24----141331
Kerosene-Type Jet Fuel62------------37871627----131205
Lubricants99------------22150------7138
Asphalt4554------------------------5057
Petroleum Coke11------------------------127
Fuel Ethanol----------------------------68
Total Companies490477185128100--9569911497411972--1,8952,151
Total Imports490478185127100--95699116274119----1,8952,165
US Petroleum Product Imports, October 2022
CanadaMexicoIraqUnited KingdomSouth KoreaIndiaMalaysiaGrand Total
('000 b/d)Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21Oct '22Oct '21
Valero8146423252--3714--3011821--331350
Exxon Mobil1719432048--1610----19--32--235246
Irving Oil114107------------------------114107
Shell320--------12221--------110196
Phillips 6644254----125110711----10756
BP--10--------11--55--17----6872
Chevron----1910------------3------6166
PBF Energy--73116--------------------5571
Saudi Aramco3--2--------03------12--5046
Plains4622------------------------4622
Vitol31--------------------6--3653
George E. Warren Corp----49--------------17----3661
Trafigura31----------------73----3699
Freepoint Commodities------------3--------------3210
Atlantic Trading--3------------------12----2973
Top 1527323916691100--8051114647--71--1,3471,528
Total Companies490477185127100--9569911497411972--1,8952,151
Total Imports490478185127100--95699116274119----1,8952,165
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John van Schaik, New York