Saudi Arabian Crude and the US Market

Over the past few years US domestic crude oil production has supplanted foreign crude oil imports. To the extent that they possibly can, domestic refiners have shifted to local grades that have trended at an often significant price discount. Interestingly, however, fixture activity on the Arabian Gulf to US Gulf trade route remains robust. In efforts to remain competitive, Saudi Arabia has priced US-bound crude oil at a discount compared to prices posted to Asian customers. The chart below represents total reported spot fixture volume from the Arabian Gulf to the US Gulf. While monthly volumes may experience volatility, it is interesting to note the overall positive trend despite the US domestic shale oil revolution. Download here