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article imageU.S. oil exports step up a notch as domestic production soars

By Karen Graham     Feb 19, 2018 in Business
The number of barrels of U.S. oil exports heading for international markets is growing, despite OPEC's efforts to drain inventories and support oil prices. On Monday, a supertanker left Louisiana laden with oil for China.
The flood of U.S. oil exports stepped up a notch as for the first time, a fully laden supertanker sailed from the Louisiana Offshore Oil Port or LOOP. The LOOP is the only deepwater port in the U.S. capable of handling the industry's largest tankers, according to a statement.
The deepwater port is located 18 miles offshore of Port Fourchon, and according to Tom Shaw, LOOP president, the loading and subsequent sailing of the supertanker is historic because this was the first time a "new onloading configuration was accomplished with only minor modifications to existing facilities." Shaw added, "The new configuration is scalable to meet the changing needs of the industry."
The supertanker is the Saudi Arabian-owned Shaden, now heading to the Chinese port of Rizhao. The Shaden is the first supertanker to load oil from the LOOP rather than discharge it.
It takes ingenuity and attention to logistics that end up combining railways, trucks, pipelines, barges, and ship-to-ship transfers to get crude out of the country. And all this has created a bottleneck.
Most ports, with the exception of the one in Louisiana, are too shallow to handle a supertanker. This means numerous smaller tankers are loaded and shuttle multiple cargoes to the giant vessels as they wait to load offshore. The LOOP, on the other hand, will allow a large tanker to be loaded in one go.
LOOP’s deepwater
LOOP’s deepwater terminal.
The U.S. now rivals Saudia Arabia
With average production hitting 10 million barrels per day, "There could not be a better time to offer this service as domestic production surpasses 10 million barrels per day in the ever-dynamic global crude oil market," said Shaw. And with the new export capacity at the LOOP, onloading of very large crude carriers will significantly cut shipping costs.
The latest oil boom has also allowed drillers to increase their efficiency, and they now are able to produce oil at a lower cost than their foreign rivals. The Energy Department's latest annual outlook shows the U.S. becoming a net oil exporter by 2020, after becoming a net natural gas exporter last year.
"The tremendous growth in responsible energy development has boosted our nation’s economy and security while providing our strategic allies with a reliable trading partner," the energy department email read. "That’s the power of American energy."
On the week ending February 9, the U.S. was exporting on average, 1.3 million barrels per day. The four-week moving average for exports is more than twice the rate from the same period last year, federal data show.
Besides becoming the world's biggest exporter of oil and gas, this could also raise tensions with our allies in the Middle East. Hezbollah, the Iranian-backed Shia political party based in Lebanon, accused the Trump administration and its Gulf allies on Friday of planning to take over Syria's oil and natural gas wealth, the government-sanctioned Mehr News Agency reported.
More about oil exports, US oil and gas, Opec, asia market, 10 million BPD
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