US crude exports hit record high in June

US crude exports in June averaged a record high of 3.16mn b/d, with South Korea and Canada as the top two destinations, according to trade data released by the Census Bureau today.

The total was up from 2.9mn b/d in May and exceeded the previous record high of 2.99mn b/d in February. The June total is up from 2.2mn b/d in June 2018.

South Korea was the top importer of US crude with 605,000 b/d followed by Canada with 311,000 b/d. The other countries in the top five include China, India and the Netherlands.

China imported about 292,000 b/d of US crude in June, up from 247,000 b/d in May. China has returned to the top five list of US importers after its intake dropped sharply starting in the second half of last year as a trade conflict heated up with the US.

China took an average of 377,000 b/d of US crude in the first seven months of 2018 and was consistently the first or second top destination for US crude. But Chinese state-controlled trading firm Unipec stopped buying US crude in August 2018. China had planned to impose a 25pc import tax on US crude as part of retaliatory tariffs on $16bn/yr of imports from the US in August, but it ultimately removed crude from its final list of tariffs.

China's imports of US crude dropped to zero in January of this year and in August-October of 2018.

The trade war escalated yesterday as US president Donald Trump threatened to impose a 10pc tariff on the $300bn/yr of imports from China not yet subject to any duties.

The Trump statement on Twitter came after US and Chinese negotiations earlier this week completed another round of talks. Both countries' negotiators put an optimistic spin on the results of the trade talks in Shanghai and said they would meet in Washington in early September.

India, which took 290,000 b/d of US crude in June, has increased its intake of US oil in recent months to help offset the loss of Iranian crude because of US sanctions on Iran. India was one of eight countries that was granted a six-month waiver in November to the sanctions. Those countries were expected to wind down their Iranian imports and find alternatives. The sanctions expired on 2 May.

Other countries that imported US crude in June include Australia, Brazil, Bulgaria, Colombia, Denmark, Dominican Republic, France, Germany, Greece, Ireland, Italy, Jamaica, Japan, Nicaragua, Norway, Panama, Peru, Poland, Singapore, Spain, Taiwan, Thailand, the United Arab Emirates, the United Kingdom and Uruguay.

The trade data includes several categories of oil, including crude under 25°API, crude that is 25°API or higher, and condensate derived wholly from natural gas.

US crude exports reached a record yearly high of 2mn b/d in 2018, up by 73pc from 2017.

The Energy Information Administration separately estimates weekly crude exports. US crude exports averaged 2.6mn b/d in the week ended 26 July, according to the most recent weekly estimates.