Shale boom powers record oil exports

The world’s largest oil consumer exported more hydrocarbons than ever before in 2017 and shows no signs of slowing down.

You name it — crude oil, gasoline, diesel, propane and even liquefied natural gas — all were shipped abroad at a record pace. While the surge comes many years after the shale boom started, it can be traced straight back to the growth of horizontal drilling and fracking. U. S. exports are poised to expand even further, as the fear of peak oil supply has all but vanished just as a new demand threat emerges in the form of electric vehicles.

Americans are expected to end the year pumping oil out of the ground at rates unseen since the early 1970s. More and more of it is going overseas, giving OPEC a headache as the group restrains its own output.

Last year the U. S. tested the export waters after a nearly four- decade- old ban was removed. But this year, purchases of U. S. light, sweet crude have skyrocketed as pipeline and dock infrastructure was built out and the wider price spread between Brent and West Texas Intermediate crude coaxed more cargoes abroad.

Canada, once the only regular buyer of U. S. crude, finds itself competing with refiners in Europe and Asia. China’s appetite for American oil is voracious: in April, China bought more than Canada did for the first time.

“It’s pretty amazing, really,” said Matt Smith, ClipperData’s director of commodity research. “You learn to never say never in this market.”

Of all the emerging trade flows this year, crude deliveries into Europe and Asia are most surprising, according to Smith. And if the price of European oil stays suspended into the New Year — a good possibility after the Forties oil pipeline was shut this week to repair a crack — U. S. exports will continue hold above 1 million barrels a day.

“The U. S. has fully integrated itself into the global market,” Smith said by phone. “You have U. S. crude going into Europe, and European crude heading elsewhere because the U. S. is selling crude into its own backyard.”