Tanker Operator: First US Crude Export Cargo Leaves Texas

12 Jan 2016: “US crude oil exports will change the oil and tanker market, according to Poten & Partners. “Most analysts agreed that the impact of the lifting of the ban on oil markets would be of limited importance, at least in the short-term, due to the world’s oil glut, while also, the currently narrow WTI-Brent spread renders US crudes noncompetitive in the export market, Poten said. “As for the export infrastructure, only US Gulf ports have the capability to load crude oil and most of these facilities only support Aframaxes but some, such as Corpus Christi, will be able to handle Suezmaxes in the future. “VLCCs may be used in the short term if the economics support transhipments in the US Gulf. Louisiana Offshore Oil Port (LOOP) is the only VLCC facility in the area. And is believed to be considering offering loading operations by 2018 and adding storage capacity, but re-configuring LOOP will take time and money, Poten pointed out. “As a result, it was thought that the initial US crude oil exports will probably be undertaken on Aframax hulls. “Poten said; ‘Once exports start flowing, Aframax crude tankers will be the initial beneficiaries. If production continues to increase and pricing is favourable, Suezmaxes and VLCCs may come into the mix – which would open up Asian markets. The impact on product carriers will depend very much on the relative competitiveness of the US Gulf refiners. “’The lifting of the US crude oil export ban will probably be a net negative for the US Jones Act market. This market did receive a boost from the coastwise transportation of crude oil in the past, but these movements, which already declined significantly in 2015, may disappear altogether,’ the broker said.”