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US crude exports to top 2mn b/d in 2025: Turner Mason

20 Jun 2017 17:20 (+01:00 GMT)
US crude exports to top 2mn b/d in 2025: Turner Mason

Houston, 20 June (Argus) — US crude exports should exceed 2mn b/d by 2025 amid growing production of US light crude, consultancy Turner Mason said.

The bulk of the exports will come from the Permian basin in west Texas and eastern New Mexico, where crude production should increase by 2.2mn b/d by 2025, said Turner Mason executive vice president John Auers at the Argus Crude & Refined Products Exports Conference in Houston.

Total US production should rise to 12mn b/d by 2025, with most of the increase going to exports, he said.

Output in the Eagle Ford shale in south Texas should increase by 600,000 b/d and production in the Bakken shale, located mostly in North Dakota, should be 250,000 b/d.

Gulf of Mexico output should be fairly flat, rising by about 80,000 b/d, with 50,000 b/d in medium grades and 30,000 b/d of light crude.

The "big wild card" for US production forecasts is Alaska as the administration of President Donald Trump is considering allowing drilling in the the Arctic National Wildlife Refuge in northern Alaska, Auers said.

The Energy Information Administration (EIA) earlier this month raised its US crude production forecast for 2018 by 50,000 b/d to a record 10.01mn b/d, according to the agency's most recent monthly Short-Term Energy Outlook (Steo). The EIA's 2018 crude production forecast exceeds the previous record of 9.6mn b/d set in 1970.

US crude exports averaged 1mn b/d in April, up from 834,000 b/d in March, according to the latest trade data from the US Census Bureau.

China was the top destination and imported about 323,000 b/d of US crude, followed by Canada with about 296,000 b/d. China also surpassed Canada as the number one destination in February.

Since the previous administration of US President Barack Obama lifted 40-year old restrictions on most oil exports in December 2015, US oil — primarily light crude — has been exported to countries around the globe.

Most crude exports going forward will go to Europe and Asia, Auers said. Europe has a potential for 1mn b/d of US light grades, he said. The potential in Asia is "unlimited" although there is significant competition.

US crude exports averaged about 520,000 b/d in 2016, with Canada receiving about 300,000 b/d.