US crude exports hit record high in October

US crude exports reached a record high in October as more pipelines have started service moving Permian crude to the US Gulf coast.

Domestic crude exports averaged 3.38mn b/d in October, up from 3.09mn b/d in the previous month, according to trade data released today by the Census Bureau. The previous record high was 3.16mn b/d in June, according to the monthly trade data.

Exports have risen in recent months as new large pipelines ramped up in August moving more Permian basin crude to the US Gulf coast, including the 670,000 b/d Cactus 2 pipeline and the 400,000 Epic crude line. Both of those lines move crude to Corpus Christi, Texas, which is becoming a key outlet for US exports.

Another large project, the 900,000 b/d Gray Oak pipeline, started initial service late last month from the Permian to Corpus Christi. That line will also have destinations near Houston when it goes into full service in the first quarter of 2020.

Canada was the top destination for US crude in October taking about 490,000 b/d, followed by the Netherlands with about 420,000 b/d and South Korea with 395,000 b/d.

China imported zero US crude in October, dropping from about 200,000 b/d in September and 246,000 b/d in August.

China imposed a 5pc tariff on US crude on 1 September as the trade war intensified between the two countries.

Meanwhile, the US Treasury Department on 25 September placed two subsidiaries of China's state-owned Cosco Shipping and other Chinese shippers on the US sanctions list, citing their participation in Iran oil trade in contravention of US sanctions. The move caused traders in the Americas to cancel bookings of tankers operated by Cosco and scramble for replacements. The Treasury Department later clarified the extent of the sanctions.

China in recent months had returned to the top five list of US crude importers after its intake dropped sharply starting in the second half of last year on an escalation in the trade conflict. China's imports of US crude dropped to zero between August-October of 2018 and in January of this year.

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

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

US crude was exported to a total of 31 countries in October. The monthly 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.

By Eunice Bridges