Overview

WTI Midland is now the world’s largest freely traded grade of crude oil by output and volume. In December 2015, the US lifted a 40-year ban that had restricted exports of US crude overseas. Since the ban was lifted, export volumes have soared and US crude now makes its way to markets all over the world.

The meteoric rise of US crude on the global stage has made Permian basin crude WTI Midland the world’s most important grade and has put the US Gulf coast at the epicentre of global crude trade. Houston is the point of greatest optionality for crude oil. From Houston, crude can be refined in the world’s largest refining centre, moved domestically within the world’s largest oil demand hub, and exported to all corners of the globe. Price dictates these options, making the price at Houston the source of all key comparisons.

Light sweet WTI Midland is now firmly at the centre of price discovery for crude oil. It is a key component of Dated Brent and the global swing barrel, and European and Asian buyers are beginning to purchase crude on a WTI Houston basis. This crude has truly emerged as the heartbeat of the global crude system.

 

A global waterborne crude, underpinned by a liquid pipeline market

In most major markets, crude oil is generally transported by water. But the WTI Houston and Midland markets are different, with oil travelling first by pipeline in small, rateable transactions. The high volume of daily transactions means that there are many points of price discovery throughout the day. Our expert team of crude oil market reporters endeavour to capture it all.

Cargo markets by nature consist of a few, large single trades. But at the US Gulf coast, cargoes are priced at a differential to the pipeline market, so they benefit from the underlying price dynamics of the highly liquid and transparent US pipeline market.

For this reason, understanding the WTI supply chain and the drivers of its price formation is imperative for anyone buying, selling or trading crude oil across the globe.

 

WTI and Argus, a deeply rooted relationship

For two decades, Argus WTI assessments at Midland and Houston have been the standard physical benchmarks for US crude, as well as the settlement indexes for a robust derivatives market. These prices are assessed as differentials to the Argus WTI formula basis, based on the Nymex light sweet crude futures contract — one of the world’s most actively traded oil futures. They are the clear choice for trading companies seeking to manage WTI positions in the physical and paper markets.

Argus WTI Houston and Argus WTI Midland collectively form the basis of the world’s third-largest crude oil derivatives market, after Nymex light sweet and Ice Brent. The contracts are actively traded over the counter and cleared by oil brokers through exchanges such as CME and Ice.

Our rich, deep and trusted coverage of the US crude oil market is unrivalled. You need Argus to make confident business decisions.

Latest crude oil news

Browse the latest market moving news on the global crude oil industry.

News
24/04/17

US reimposes Venezuela oil sanctions

US reimposes Venezuela oil sanctions

Washington, 17 April (Argus) — The US administration today reimposed sanctions targeting Venezuela's oil exports and energy sector investments and set a deadline of 31 May for most foreign companies to wind down business with state-owned PdV. The US decision rescinds a sanctions waiver issued last October, which allowed Venezuela to sell oil freely to any buyer and to invite foreign investment in the country's energy sector. The waiver, which was due to expire on 18 April, was tied to Caracas' agreement to hold a competitive presidential election and to allow opposition politicians to contest it. Venezuelan president Nicolas Maduro's government reneged on that deal by refusing to register leading opposition candidate Maria Corina Machado or an alternative candidate designated by her, a senior US official said. The US considered the potential effects on global energy markets and other factors in its decision, but "fundamentally, the decision was based on the actions and non-actions of the Venezuelan authorities," the official said. The separate waivers granted to Chevron and to oil field service companies Halliburton, SLB, Baker Hughes and Weatherford will remain in place. Chevron will be allowed to continue lifting oil from its joint venture with PdV, solely for imports into the US. US-bound Venezuelan crude volumes averaged 133,000 b/d last year. Chevron said its Venezuela output was 150,000 b/d at the end of 2023. Argus estimated Venezuela's crude output at 850,000 b/d in March, up by 150,000 b/d on the year. PdV said it will seek to change terms of its nine active joint ventures , starting with Spain's Repsol, in an effort to boost production. The reimposition of sanctions will primarily affect Venezuelan exports to India and China. India has emerged as a major new destination for Venezuelan crude since the US lifted sanctions in October, importing 152,000 b/d in March. There are two more Venezuelan cargoes heading to India and are expected to arrive before the 31 May deadline. The VLCC Caspar left the Jose terminal on 14 March and was expected to arrive at a yet-unknown west coast Indian port on 26 April. The Suezmax Tinos left Venezuela on 18 March and was due at Sikka on 30 April. By contrast, Chinese imports of Venezuelan Merey, often labeled as Malaysian diluted bitumen, have been lower since October. Independent refiners in Shandong, which benefited from wide discounts on the sanctioned Venezuelan crude, cut back imports to just a fraction of pre-relief levels. By contrast, state-controlled PetroChina was able to resume imports. The Merey discount to Brent already widened in anticipation of a possible reimposition of US sanctions. Reprieve expected for European companies Separate US authorizations previously issued to Repsol and to Italy's Eni to allow oil-for-debt deals with PdV and to enable a Shell project to import natural gas from Venezuela's Dragon field to Trinidad and Tobago are expected to remain in place. The US sanctions enforcers as a rule do not disclose the terms of private sanctions licenses, and the European companies were not immediately available to comment. The US would still consider future requests for sanctions waivers for specific energy projects, another senior official said. Repsol imported 23,000 b/d of Venezuelan crude into Spain last year and 29,000 b/d so far this year, according to Vortexa data. The last cargo to arrive was on 15 April. Hope springs eternal The US administration says it will consider lifting the sanctions again if Maduro's government allows opposition candidates to participate in the July presidential election. The US action today "should not be viewed as a final decision that we no longer believe Venezuela can hold competitive and inclusive elections," a third senior official said. "We will continue to engage with all stakeholders, including Maduro representatives, the democratic opposition, civil society and the international community to support the Venezuelan people's efforts to ensure a better future for Venezuela." By Haik Gugarats and Kuganiga Kuganeswaran Chinese imports of Venezuelan crude Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

US House advances Ukraine, Israel aid bills


24/04/17
News
24/04/17

US House advances Ukraine, Israel aid bills

Washington, 17 April (Argus) — The Republican-controlled US House of Representatives is preparing to advance a bill to extend military and economic aid to Ukraine, as Kyiv has complained about critical shortages of ammunition on the battlefield and has resorted to aerial attacks against refineries in Russia. The House is also advancing a separate bill to extend military aid to Israel and to pay for the rising cost of US operations in the Middle East, including the cost of providing maritime protection from the Houthi attacks on commercial shipping in the Red Sea. Yet another bill would extend military aid to Taiwan and other US partners and allies in the Indo-Pacific region. The US Senate in February approved a bill providing around $60bn in military aid for Ukraine, $14bn for Israel, and $9bn in humanitarian aid to Gaza and other global crisis spots. House speaker Mike Johnson (R-Louisiana) has, in effect, deconstructed the Senate bill into individual components in an effort to facilitate their passage in a chamber where his party has a two seat majority and the Republican lawmakers allied with former president Donald Trump oppose aid to Ukraine. In an effort to secure the Republican caucus' assent to the three foreign aid bills, Johnson is also planning to advance a separate bill including a hodgepodge of his party's policy priorities, such as a ban on social media network TikTok and sanctions against Iran. Yet another bill would advance draconian restrictions on immigration and strengthen the security of the US-Mexico border. None of the bills released today would require President Joe Biden to reconsider his pause on the issuance of new LNG export licenses. Johnson's legislative proposal has immediately drawn opposition from some members of his party, two of which said they would move to oust him as speaker. Johnson assumed his position after his predecessor Kevin McCarthy was ousted in October following a compromise government funding deal with House Democrats. "Every true conservative America First patriot in the House should vote against the rule for this borrowed foreign aid bill with no border security!" congressman Bob Good (R-Virginia) said via X social network. The foreign aid bills will have to have the backing of the Democratic caucus and a sufficient number of Republicans in order to pass. Biden said he supports the three foreign aid bills proposed by Johnson. "The House must pass the package this week and the Senate should quickly follow," Biden said. The majority-Democratic Senate leaders likewise have signaled willingness to consider separate aid bills so long as those do not significantly differ from the version passed by the Senate. The only major differences in the House version of the Ukraine aid bill is a requirement that the US provide no more than 50pc of the total economic assistance extended to Ukraine by western countries, as well as a requirement for Ukraine to repay the $9.5bn in direct economic support under the bill. Congress since February 2022 has allocated $114bn in aid to Ukraine, including $66bn for military supplies. The EU in the same period has allocated $150bn to Ukraine, mostly in economic support. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

June deadline set for Citgo auction bids


24/04/17
News
24/04/17

June deadline set for Citgo auction bids

Houston, 17 April (Argus) — Bidders for Citgo's US refining assets have until 11 June to submit offers for the company's 805,000 b/d of refining capacity and associated assets, with a tentative sale hearing set for 15 July. Documents filed Tuesday in the US District Court for the District of Delaware set 11 June as the deadline for interested parties to submit final binding bids after non-binding bids were received 22 January. The court began the auction process for Citgo's parent PdV Holding (PdVH) in October, part of the process of satisfying debts owed by Venezuelan-state owned oil company PdV. The court will file a notice of a successful bid "as soon as reasonably practicable" following the 11 June deadline and selection of a successful bidder. No date has been set for the filing of objections to the sale or replies to the objections before the tentative 15 July hearing. The legal wrangling over Citgo is unlikely to conclude even if the Delaware court successfully executes the sale as 27 businesses have filed claims against Citgo amounting to more than $21bn. The scale of Citgo's operations in the US are also a challenge to any potential buyer. Few companies look ready to buy the company's three refineries, three lubricants plants and retail and midstream assets. The assets have been valued by various analysts anywhere between $6.5bn and $40bn, with a lofty valuation potentially deterring bidders. But the auction process itself has been the main cause for concern. Independent refiner PBF Energy's chief executive Matthew Lucey previously called the auction a "quagmire" , considering its ties to a complex geopolitical situation in Venezuela, saying he did not expect the sale to go anywhere in the near term. Marathon Petroleum expressed similar disdain. "We're not interested in the auction process," Marathon chief executive Michael Hennigan said on an earnings call in October . By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

South Sudan eyes Dar Blend export restart in 6-8 weeks


24/04/17
News
24/04/17

South Sudan eyes Dar Blend export restart in 6-8 weeks

London, 17 April (Argus) — South Sudan aims to restart exports of its heavy sweet Dar Blend crude grade within six-eight weeks as it works to repair a pipeline in war-torn Sudan, finance minister Awow Daniel Chuang told Argus . Problems along the Petrador pipeline since February have prevented around 100,000 b/d of South Sudan's Dar Blend from reaching Sudan's Bashayer terminal on the Red Sea for export. This has seen South Sudan's crude production almost halve to around 80,000 b/d because of a lack of alternative outlets for the grade. But production of the country's medium sweet Nile Blend grade continues as it is transported to Bashayer through the separate Greater Nile oil pipeline. Landlocked South Sudan is entirely reliant on Sudan to export its crude and depends on oil sales for more than 90pc of government revenues. Chuang, a former oil minister, said work to repair the pipeline was progressing well despite logistical challenges, and that unless something unforeseen happened, flows "should resume" within six-eight weeks. The pipeline has suffered from gelling issues — solidifying crude — leaks and pressure drops for months. One key issue has been a lack of diesel, which is typically used to heat the crude or dilute it to help it flow. Repairs have been complicated by the civil war in Sudan, pitting the army against the paramilitary Rapid Support Forces. The conflict passed the one-year mark on 15 April, with no end in sight. While production and exports in both Sudan and South Sudan held up surprisingly well at the start of the conflict, problems have begun to pile up over the past few months. South Sudan is sending diesel to Sudan because of the closure of the 100,000 b/d Khartoum refinery, which has come under repeated fire. Sudan typically produces around 50,000 b/d of mostly Nile Blend crude, but this is thought to have been impacted by the civil war. Argus assessed Sudan's crude output at 20,000 b/d in March. South Sudan's crude production was trending at around 150,000 b/d before the pipeline outage. Argus assessed South Sudan's crude output at 80,000 b/d in March. Crude exports from Sudan's Bashayer port averaged 130,000 b/d in 2023 and stood at 168,000 b/d in January, according to Kpler. But exports have only averaged about 65,000 b/d since February. South Sudan's crude production stood at around 300,000 b/d in the first few months following its independence from Sudan in 2011. It has a short-term target to grow output to 230,000 b/d and 450,000 b/d in the longer term — something the country's leaders acknowledge will require political stability and a surge in foreign investment. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

TotalEnergies rows back on Uganda oil project timeline


24/04/17
News
24/04/17

TotalEnergies rows back on Uganda oil project timeline

Kampala, 17 April (Argus) — The head of TotalEnergies' Ugandan operations said the company may miss its long-standing target to start crude production from the country's 230,000 b/d Lake Albert project by the end of next year. "I want to answer this question that everyone is asking, will first oil flow in 2025? I am not sure end of 2025 will be the timeline," TotalEnergies' general manager in Uganda Philippe Groueix told an oil and gas conference in Kampala today. The timing will depend on the agility of stakeholders to co-operate to resolve outstanding issues, Groueix said. The Lake Albert project has been controversial since its inception. It involves building the world's longest heated crude export pipeline to connect the TotalEnergies-operated 190,000 b/d Tilenga and Chinese CNOOC-operated 40,000 b/d Kingfisher oil fields in Uganda's Lake Albert basin to the port of Tanga on Tanzania's Indian Ocean coast. The project partners have faced a barrage of legal challenges in the last few years from environmental groups and non-governmental organisations who claim the pipeline poses a risk to the environment and the livelihoods of local populations. Meanwhile, international banks have come under pressure to distance themselves from the project and in 2022, the European Parliament passed a resolution calling on TotalEnergies to delay work on the pipeline by a year in order to study the feasibility of an alternative route. Despite the above-ground challenges, TotalEnergies, CNOOC and the Ugandan government have stuck rigidly to a 2025 start-up. More recently, TotalEnergies tweaked its estimate to the "end of 2025", with chief executive Patrick Pouyanne telling investors in February that the project would be around 60pc complete by the end of this year. Groueix's comments today mark the first time the company has flagged a potential delay, although he did not offer a new timeline. "First oil will depend on our agility to work together, although we are all aiming to produce as soon as possible," Groueix said, adding that four rigs are drilling at the oil fields, three at Tilenga and the other at Kingfisher. "It is Uganda's right to exploit her natural resources and we shall produce this oil in the most responsible way possible to decarbonize," he said. "Our projects will not flare gas, but we shall produce LPG from this gas and this will reduce the use of charcoal and firewood by a big percentage, thereby saving trees and improving climate. So the activists should know that we are part of the agenda to promote the environment." Uganda's energy minister Ruth Nankabirwa gave a sanguine response to news of a possible delay, comparing Uganda's oil and gas projects to a woman in labour. "The child can come before the set timeline or shortly after, but the signs are showing that the child is kicking," she said. Nankabirwa said she will head to Beijing early next month to meet Chinese president Xi Jinping to discuss financing for the $5bn crude pipeline. Chinese export credit agency Sinosure is in talks to provide up to $3bn for the pipeline and is due to make a decision on this in June. By Mercy Mastsiko Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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