U.S. Exports To The Rescue?

Growing U.S. production and exports could boost ton-miles

Persistent high oil prices amid a tight global oil market have created a powerful incentive for U.S. crude oil producers to put more rigs to use and expand tight oil production. Major producers like ExxonMobil and Chevron have announced in their recent quarterly earnings calls that they will boost production by 25% and 10% respectively. Some other producers have been more modest in their ambitions citing their commitment to capital discipline and shareholder returns. However, it seems that the tide has turned.

In their most recent Short-Term Energy Outlook, the U.S. Energy Information Administration forecasts that U.S. crude oil production will rise to an average of 12 million barrels per day (mb/d) in 2022 and 12.6 mb/d in 2023, which would be a record on a yearly average basis (the current record is 12.3 mb/d, set in 2019). The average 2022 production would represent an increase of 800,000 b/d over the 11.2 mb/d average U.S. output of 2021 (+7%). The impact this will have on the tanker market depends on two main factors: (1) how much of the extra output will be exported and (2) where will these exports be headed?

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