Financial Times: Oil Groups to Export Crude from US

“Some of the world’s biggest oil companies and traders are poised to export substantial amounts of crude from the US for the first time in decades, as booming output there promises to reshape global energy markets. . . . Until now, only minimal amounts of US crude have been exported overland from the north of the country to Canada. Traders, though, now want to export crude by tanker from the Gulf of Mexico to the Atlantic coast of Canada, where Imperial Oil, Irving Oil and a unit of Korea National Oil Corp each own a refinery. In the Eagle Ford ‘shale’ of Texas, production has jumped to 280,000 b/d from almost nothing four years ago and its low-sulphur crude is ill-suited for many refineries nearby. One advantage of exporting the crude to Canada is that the US’ Jones Act demands more expensive US-flagged ships for coastwise domestic routes. Poten & Partners, a ship broker, estimates it would cost less than $1.50 per barrel to ship crude in a foreign-flagged medium-sized Aframax tanker from Texas to the largest Canadian refinery at St John, New Brunswick. A shorter journey from Texas to refineries in Philadelphia recently cost $4.55 a barrel.”