The U.S. has become a major player in the global energy markets, thanks to the shale revolution that has unlocked huge amounts of crude oil and natural gas from the tight and low-permeability formations. The shale revolution has enabled the U.S. to become the world’s largest producer and exporter of crude oil and natural gas, and to achieve energy independence and security. The shale revolution has also created economic and environmental benefits, such as lower energy prices, higher revenues, more jobs, and lower emissions.

But the shale revolution has also brought new challenges and opportunities for the U.S. crude oil and refined products markets, as they have to cope with the fluctuations and the shocks of the global oil and gas demand and supply, such as the COVID-19 pandemic, the OPEC+ production cuts, and the geopolitical tensions. The shale revolution has also affected the dynamics and the relationships of the various crude oil and refined products benchmarks, such as West Texas Intermediate (WTI), Brent, Western Canadian Select (WCS), and Magellan East Houston (MEH). These benchmarks are the reference prices for the different grades and locations of crude oil and refined products in the U.S. and the international markets, and they reflect the quality, the transportation cost, and the market conditions of the crude oil and refined products. The benchmarks are also used to price the crude oil and refined products contracts and transactions, and to hedge the crude oil and refined products price risk. The benchmarks are connected and interact with each other, depending on the availability and the accessibility of the crude oil and refined products supply, the demand and the preferences of the crude oil and refined products buyers, and the arbitrage and the competition of the crude oil and refined products markets.

Exports are the key driver of the U.S. crude oil and refined products markets, as they determine the production, the consumption, the transportation, and the pricing of the crude oil and refined products. Exports are also the key determinant of the future growth and value of the U.S. crude oil and refined products industry, as they reflect the competitiveness and the attractiveness of the U.S. crude oil and refined products in the global markets. Exports are influenced by various factors, such as the production levels, the pipeline capacity, the refinery demand, the export demand, the global oil prices, and the geopolitical events.

Some of the key trends and insights on the U.S. crude oil and refined products exports are:

• Most incremental U.S. production is light-sweet crude from the Permian and other shale plays. U.S. refineries are already using all the price-advantaged domestic shale oil they can handle. Refineries in Europe and Asia need more light-sweet crude, and Latin America and Africa offer opportunities for U.S. product exporters. The bottom line: Crude exports are key to U.S. production growth, and product exports are key to U.S. refiners.

• The U.S. exported an average of 3.2 MMb/d of crude oil and 5.4 MMb/d of refined products in 2020, according to the U.S. Energy Information Administration (EIA). The U.S. crude oil exports decreased by 7% from 2019, while the U.S. refined products exports increased by 1%. The U.S. crude oil exports were mainly destined to China, Canada, India, and South Korea, while the U.S. refined products exports were mainly destined to Mexico, Canada, Brazil, and Japan.

• The U.S. crude oil exports are expected to increase to 3.6 MMb/d in 2021 and 4.2 MMb/d in 2022, according to the EIA. The U.S. refined products exports are expected to increase to 5.6 MMb/d in 2021 and 5.8 MMb/d in 2022. The U.S. crude oil exports are expected to increase due to the recovery of the global oil demand and the favorable price differentials between WTI and Brent. The U.S. refined products exports are expected to increase due to the recovery of the global refined products demand and the competitive advantage of the U.S. refineries.

• The U.S. crude oil and refined products exports are supported by the existing and the planned infrastructure, such as pipelines, terminals, and vessels, that can access the domestic and the international markets. The U.S. crude oil and refined products exports are mainly concentrated in the Gulf Coast, which accounts for about 80% of the total U.S. crude oil exports and 60% of the total U.S. refined products exports, according to the EIA. The Gulf Coast has the largest and the most complex refining and exporting capacity in the U.S., and it hosts various terminals and pipelines that can connect to the Permian Basin, the Eagle Ford Shale, the Bakken Shale, and other regions.

“I Need You” is a report that provides a comprehensive and detailed analysis of the U.S. crude oil and refined products exports and how they are driven by the production growth. The report covers the history, the current status, and the future outlook of the U.S. crude oil and refined products exports, and how they affect the markets, the infrastructure, and the benchmarks of the crude oil and refined products. The report also provides data, charts, and maps that illustrate the trends and the insights of the U.S. crude oil and refined products exports. The report is part of RBN Energy’s 2023 Drill Down report series, a suite of reports covering many of the key issues expected to impact the markets for crude oil, natural gas and natural gas liquids.