US March crude exports fall, South Korea top buyer

US crude exports fell by 1.5pc in March with South Korea surpassing India as the top destination.

Total domestic crude exports averaged about 2.61mn b/d in March, down from 2.65mn b/d in February, according to trade data released today by the US Census Bureau.

The drop in US crude exports in March was surprising, slipping from February levels that were reduced by severe winter weather that disrupted pipeline flows and shut in production for part of the month.

South Korea was the top taker of US crude in March, averaging 398,000 b/d. Loadings to India were second with 344,000 b/d. India had been in the top spot the two previous months.

State-controlled Indian refiners in December expanded their import portfolio to include more US grades. IOC is now including West Texas Light (WTL) as an eligible grade in its weekly import tenders and Hindustan Petroleum (HPCL) issued a unique tender that sought Mars for its Vizag refinery earlier this year.

But a growing Covid-19 outbreak in India is weighing heavily on the oil demand outlook in that country. The total number of Covid-19 cases in India has surpassed 20.2mn, making it the second most infected country after the US, according to data from Johns Hopkins University.

Other Asia-Pacific countries were also among the top US crude destinations. US crude loadings to Taiwan averaged a record high 305,000 b/d in March, while US crude headed to China averaged 339,000 b/d, up by about 70,000 b/d from February.

China's intake of US crude was volatile last year, but exports to that country rose sharply in May-December 2020, averaging 690,000 b/d during that time, buoyed by an interim trade agreement signed last year with the administration of former president Donald Trump. The deal required China to buy $27bn of US crude and other energy commodities in 2020 and $42bn in 2021. Chinese purchases of US crude last year more than tripled from 2019, but they remained well below the dollar targets set in the phase one deal.

US president Joe Biden's administration is reviewing how China has implemented the interim deal and could hold trade talks with Beijing soon, US trade representative Katherine Tai said on 28 April.

Overall US crude exports appear to be waning after showing resilience last year.

Domestic oil exports reached a record annual high of 3.2mn b/d in 2020, despite the Covid-19-related plummet in global demand and a string of tropical storms and hurricanes that disrupted shipping in the Gulf of Mexico.

The monthly trade data comprises 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