U.S.

Refined Petroleum Exports

18 December 2015

Petroleum includes crude oil and petroleum products. Petroleum products

include transportation fuels, fuel oils for heating and electricity generation,
asphalt and road oil, and the feedstocks used to make chemicals, plastics,
and synthetic materials found in nearly everything we use today. The three
largest-volume products of U.S. refineries are gasoline, fuel oil (including
diesel fuel and home heating oil), and aviation fuel, which together make
up more than 84 percent of output. U.S. exports of petroleum product have
accounted for an increasing share of the global (non-U.S.) market for these
products, rising from 8 percent in 2009 to 15 percent in 2013.

In 2013 the United States exported $1.42T, making it the 2nd largest
exporter in the world. The most recent exports are led by refined
petroleum which represent 7.18% of the total exports of the United States,
followed by cars, which account for 3.95%. In 2013 the United States
imported $2.13T, making it the largest importer in the world. The most
recent imports are led by crude petroleum which represent 12.1% of the
total imports of the United States, followed by cars, which account for
7.3%.

The United States is the world’s largest petroleum consumer, and it

consumed about 19 million barrels per day (MMbbl/d) of petroleum
products in 2014 (about 20% of world total). The United States is the
world’s third-largest crude oil producer, but only part of the nation’s
petroleum needs are met by crude oil and other liquids produced in the
United States. About 76% of the 6.97 billion barrels of petroleum products
that were consumed in the United States in 2014 were gasoline (47% of
total petroleum consumption; includes biofuels), heating oil and diesel fuel
(21%), and jet fuel (8%).

The United States was for decades, through 2008, the world’s largest net
importer of refined petroleum products. But the situation quickly changed
in 2008 as American refineries became much more cost-competitive due to
large increases in U.S. production of oil, natural gas, and natural gas
liquids. Due to the strong growth in U.S. exports, the U.S. share of global
exports of petroleum products, by volume, nearly doubled during 2009-13
from 8 percent to 15 percent. The U.S. became the fourth largest world
exporter in 2013, following the European Union (EU) (30%), Canada
(16%), and Russia (15%).

Overall, the U.S. remains a net importer of crude oil and refined petroleum
products. According to the U.S. Energy Information Administration, the
reliance on oil from other countries has been declining over the past 8
years, from its peak in August 2006. The United States imported about 7.3
MMbbl/d of crude oil and 1.9 MMbb/d of petroleum liquids and refined
products in 2014. About 27% of the petroleum consumed by the United
States was imported from rom the Persian Gulf countries of Bahrain, Iraq,
Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates, the lowest
level since 1985.

In 2014, about 80% of gross petroleum imports were crude oil, and about
46% of the crude oil that was processed in U.S. refineries was imported. In
addition to crude oil, the United States also imports refined petroleum
products such as gasoline. Although the United States produces most of
the petroleum products it consumes (using imported and domestically
produced crude oil and other liquids), it imported about 1.9 MMbbl/d of
finished petroleum products in 2014. In addition to imports of finished
petroleum products such as gasoline, diesel fuel, and jet fuel, the United
States also imports unfinished products used as refinery inputs and
blending components. Unfinished oils are refined from crude oil at
refineries outside the United States. Imported unfinished oils are used as
inputs to U.S. refineries for processing into finished petroleum products.
Imported gasoline blending components and fuel ethanol are blended at
U.S. refineries and terminals to produce finished gasoline.

The five largest sources of U.S. net crude oil and petroleum
product imports in 2014 were:

Canada (38%)
Saudi Arabia (17%)
Venezuela (10%)
Iraq (5%)
Russia (5%)

The United States also exported 3.8 MMbbl/d of crude oil and petroleum
products (0.3 MMbbl/d was crude oil), which made the United States a net
exporter of petroleum liquids and refined products. Net imports of crude
oil and petroleum products (imports minus exports) averaged 5.2
MMbbl/d and accounted for 27% of U.S. total petroleum consumption in
2014, the lowest level since 1985. According to the EIA Petroleum Data,
exports of noncrude petroleum products from United States averaged 3.8
million b/d in 2014, an increase of 347,000 b/d from 2013, and a new
record high. In 2014, the United States exported an average of 0.3
MMbb/d of crude oil, and nearly all of it went to Canada. Increased exports
of motor gasoline and hydrocarbon gas liquids (HGL), including propane
and butane, were the main contributors to the trend, while exports of
distillate decreased

The three largest-volume products of U.S. refineries are gasoline, fuel oil
(including diesel fuel and home heating oil), and aviation fuel, which
together make up more than 84 percent of output. U.S. exports of
petroleum product have accounted for an increasing share of the global
(non-U.S.) market for these products, rising from 8 percent in 2009 to 15
percent in 2013. Global demand for distillate fuel oils has risen faster than
for other primary petroleum products, prompting U.S. refiners to increase
their yield of fuel oils at a time when U.S. demand has remained stagnant.

Global demand for distillate fuel oils has risen faster than for other
primary petroleum products, prompting U.S. refiners to increase their
yield of fuel oils at a time when U.S. demand has remained stagnant. The
main factor that de​term​ines wheth​er com​pan​ies will ex​port their re​fined
pet​ro​leum products is eco​nom​ic: how much it costs to run a re​finery,
which in turn is driv​en by the price dif​fer​ence between crude oil and re​-
fined products, a concept the en​ergy ex​perts call the “crack spread”. The
only thing that mat​ters is the spread between crude oil and re​fined
products. Because of various logistical, regulatory, and quality
considerations, exporting some products and replacing them with
additional imports is the most economical way to meet the market’s needs.
For example, refiners in the U.S. Gulf Coast region frequently find that it
makes economic sense to export some of their gasoline to Mexico rather
than shipping it to the East Coast of the United States, because lower-cost
gasoline imports are available to the East Coast from Europe.

Most of the increase in the quantity of U.S. exports of petroleum products

is attributable to reduced domestic demand for motor fuels, due in part to
a lagging economy, more fuel-efficient cars, and high gasoline prices;
increased U.S. production of crude petroleum (feedstock for petroleum
products), particularly from shale sources in North Dakota’s Bakken
Formation and Eagle Ford in Texas; refineries operating at record levels;
and high demand for fuel oils on the world market.

The competitive advantage of U.S. refiners has been attributed to the lower
price of American crude oil, as reflected by the Oklahoma-based index
price West Texas Intermediate, versus the more expensive European-based
index price Brent Crude. Due to the great surge in American production of
oil, natural gas, and natural gas liquids since 2008, those products have
been cheaper in the North American market than worldwide, giving
American refiners a major cost advantage. The discount on U.S. crude is
partially attributed to the long-standing federal ban on exports of
American crude oil.

In summary, as U.S. refiners reduced crude oil imports from overseas,

those foreign supplies were freed to be used in foreign refineries to fill
demand in other parts of the world. At the same time, U.S. refiners were
able to supply more product exports into the world, while fully supplying
shrinking U.S. consumption. According to the American Fuel &
Petrochemical Manufacturers (AFPM) data, U.S. refiners plan to increase
their use of “super light” crude oil by more than 730,000 barrels per day in
2016. According to projections in an ICF Energy Study, gross U.S. crude oil
exports are expected to reach approximately 1.8 million bpd by 2017 if
export restrictions are lifted. Therefore, lifting export restrictions is
anticipated to increase U.S. crude exports by over 1.2 million bpd.